First test of credibility: banking union. The European Parliament is extremely concerned at the delays in establishing a banking union, which was intended to achieve three objectives:
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the banking sector would be supervised more effectively;
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failed banks would no longer be bailed out with taxpayers’ money, out of a fear of causing domino effects;
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and the vicious circle of bank debt and sovereign debt would be broken.
Without a banking union we cannot win back public faith, placate the markets, guarantee sustainable economic development and generate growth. If there are still people who doubt that we need these instruments as a matter of urgency, I would urge them to listen to the recordings of in-house telephone conversations at Anglo-Irish Bank which have recently been made public. They bear witness to cynicism, hubris and arrogance. Against the background of the painful sacrifices made by the Irish people and the solidarity shown by ordinary people throughout the EU, there is something genuinely repulsive about the complete lack of compunction which these bankers displayed in seeking only to maximise their own profit at the expense of society and in seeing themselves as above the law. Their mocking of the credulity of the state lays their lack of understanding bare.
In the early hours of this morning the EU Finance Ministers finally reached agreement on the resolution of failed banks. After months of stalling tactics this at least is good news. The lack of ambition is strange, however: rather than breaking the vicious circle of bank debt and sovereign debt once and for all, the link has merely been weakened. We support the bail-in of shareholders, holders of bank bonds and customers with deposits of more than €100 000 in a liability cascade. However, watering down this agreement once again by granting national derogations makes no sense.
The Council can therefore look forward to tough negotiations with the European Parliament, because we intend to make sure that no more banks have to be bailed out with taxpayer's money, that all EU citizens enjoy the same degree of legal certainty and that an arbitrary approach to regulation does not jeopardise the internal market.
We are concerned about delays in the direct recapitalisation of banks through the European Stability Mechanism. As long ago as in June 2012, the Heads of Government of the eurozone countries reached agreement here in Brussels on the direct recapitalisation of banks through the ESM. In December 2012 you agreed to draw up practical arrangements for this recapitalisation in the first half of 2013. But hitherto ambitions do not match the actual scale of the problem: the ESM is to be given funding of €60 billion for bank recapitalisation, but according to reliable estimates the bad loans on bank balance sheets amount to more than €1 trillion.
Had these instruments been available at the time, the Cyprus crisis could probably have been averted. If banks collapse in one Member State this creates a problem for all of us in Europe – hence the need for European solutions...
The European Parliament is very concerned that decisions on the future development of Economic and Monetary Union have been put off once again. This is the fifth test of our credibility. My fellow MEPs have asked me to convey to you their serious concern at the fact that the issue of democratic accountability in our Economic and Monetary Union has thus far been completely ignored. We are convinced that in an Economic and Monetary Union sound, democratically legitimate decisions can only be taken on the basis of the Community method.
In that connection, we should like to remind you once again that under the Treaties the European Council does not have the right to propose legislation. It is not your task to issue the Commission with instructions regarding the form and content of legislative proposals. This arrogation of rights by the European Council is undermining the division of powers within the European Union and, by extension, undermining our European democracy.
Let me address these remarks directly to you, President Barroso: it is the Commission’s task to put forward legislative proposals. We strongly urge the Commission, therefore, to prepare a catalogue of convergence measures with the aim of endowing the Economic and Monetary Union with a strong social policy pillar. The European Parliament has been calling for measures such as this for quite some time, and we will continue to fight for them, in the interests of ordinary Europeans.
Please allow me to remind you once again that the European Stability Mechanism must also be managed in accordance with the Community method and that the people who manage it must be accountable to the European Parliament – in keeping with the written assurances we have received. The EU’s role in the Troika must also be subject to democratic scrutiny by the European Parliament.
Full speech
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