Berlin denies go-slow on EU bank wind-up talks
Reports claim German finance ministry is planning to stall plan until new European Commission is chosen next year
German finance minister Wolfgang Schäuble warned earlier this month that that the EU’s single resolution mechanism proposals were “built on shaky foundations”. Photograph: Eric Luke
Germany’s finance ministry has denied reports it is planning to stall EU bank resolution proposals until a new European Commission is chosen next year.
According to Die Welt daily, Berlin is ready to adopt go-slow tactics on commission proposals for a single resolution mechanism (SRM) for EU banks which Germany views as an illegal “competence hijack”.
“The government is not planning to drag out talks on the single resolution mechanism,” a ministry spokesman said yesterday, stressing that Berlin was interested in an agreement with a sound legal footing. Only once the negotiations have been concluded will we be to see whether other steps may be necessary.”
Earlier this month German finance minister Wolfgang Schäuble warned that Brussels’ SRM proposals, another pillar in the so-called EU “banking union”, were “built on shaky foundations”.
The proposal envisages a new agency within the European Commission with the power to decide when and how to shut struggling European banks. The body with a staff of 300 would include representatives from national resolution authorities on its board and oversee a wind-up fund of up to €70 billion.
Mr Schäuble has warned EU internal market commissioner Michel Barnier in a letter that his proposals were “not in keeping with the current legal, political and economic realities and create considerable risks”.
German officials complain that, by bedding the proposals down in European common market law, Brussels is attempting to establish a competence for which it has no legal entitlement. This could trigger a legal challenge from the first losers of any bank closure, they argue.