"It is indispensable that we stick to the agreed calendar on banking union and that we take steps to make sure families and small companies receive credit", Spanish Prime Minister Mariano Rajoy said. "Banking union is the credibility test of the European Union", he said, after meeting Portuguese Prime Minister Pedro Passos Coelho, who backed his calls for progress on Europe's most ambitious reform of the financial crisis.
The call came as finance ministers from the eurozone met in Brussels, ahead of which German Finance Minister Wolfgang Schäuble reiterated the need for a change to EU treaties to underpin the new system of bank resolution. Under the plan, the biggest banks will be supervised by the European Central Bank from the middle of next year. There is also to be a single bank resolution mechanism that would wind down insolvent banks. Plans for a common deposit guarantee scheme are unlikely to happen any time soon.
But while the ECB bank supervision looks set to take effect as planned, the single authority that would order and finance the closure of a bank is unlikely to materialise soon, because Germany believes it needs a change to the EU treaty.
Some were sympathetic to this message. "Many of the building blocks for the banking union can be put in place. The issue of the treaty change can be addressed later on", Jeroen Dijsselbloem, the Eurogroup chairman, said. "I think the Germans are putting forward understandable questions, which will have to be dealt with. But I don't see why that should stop us making progress on banking union."
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See also Open Europe blog: Splits in Germany (and beyond) over banking union? © Open Europe
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