Antonio Tajani said that the European Central Bank was going beyond its competence and trying to make “soft law”.
“Can the police make a law? No. The police needs to verify that the law is applied. The legislative power is in the hands of the parliament,” Mr Tajani said following a conference in Rome.
“The issue is not how to tackle the non-performing loans. It’s who decides the rules for the banks,” Mr Tajani said.
The large stock of bad loans left in the eurozone banking system after its long crisis is viewed as a lingering threat to its economic recovery. The ECB’s emerging plans to tackle the issue have become a flashpoint between the bank and Italy, which has the largest bad loan problem among the bloc’s larger economies.
The ECB said last month it planned to ask lenders to post more collateral against bad loans to discourage banks from holding them on their balance sheets for long periods. However, lawyers for the European Parliament’s legal service have issued a private opinion to say the ECB’s proposals go beyond its remit.
Whereas the bank believes its rules are needed to strengthen banks and the economic recovery, Italian officials and executives have taken an opposing view, saying the rules could trigger a fire sale of debt, imperil banks and reduce the supply of credit to businesses.
The ECB is keen to avoid a confrontation with parliament and Danièle Nouy, the central bank’s chief supervisor, suggested at a hearing in Brussels that it could revise the proposals, saying they could be “improved”. Ms Nouy came under fire at the hearing for overstepping her powers.
While the rules were not final, Ms Nouy stressed that the problem of NPLs needed to be confronted.
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