The Financial Times has published the latest text (link / full article for FT subscribers) but market participants should now be asking if this effort is becoming counter-productive. Is it plausible that it will actually work in the extreme circumstances of the imminent failure of a major bank? The increasingly probable answer is NO.
The first issue is whether such a package of proposals is likely to be enacted by the April deadline for the European Parliament's dissolution. The decision to go for inter-governmental legislation for the 'Resolution Fund' is being contested by Parliament as it would prefer an act under TFEU Article 352 because that would give the Parliament full involvement. But I am surprised that the Parliament is taking such a hard line on the Resolution Fund being a 'Union' body rather than inter-governmental, as using Article 352 requires unanimity at 28 (i.e. includes UK) and actually requires the Commission to draw it to the attention of national Parliaments and therefore anti-Europeans in the UK Parliament. That hands them a potentially wrecking power.
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© Graham Bishop
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