Deutsche Welle, 13 December 2012
Thursday
has bought an early morning deal between EU finance ministers on a new banking
supervisor. It is a single but important step towards a full banking union.
European
finance ministers struck a deal in the early hours on Thursday to give the
European Central Bank (ECB) new supervisory powers over eurozone banks.
"We
have a deal," confirmed an EU official. The news immediately impacted on
the markets, sending the euro to a high of 1.3080 against the U.S. dollar.
After 14
hours of heated talks, finance ministers came to an agreement which would give
the ECB power to police the biggest banks in the eurozone and intervene in
struggling smaller banks.
Earlier,
ministers had been oprimistic about coming to an agreement. "We have
worked out proposals," German Finance Minister Wolfgang Schäuble said on
his arrival for the talks in Brussels with the 26 other finance ministers
belonging to the bloc.
"Our
positions when we enter this meeting are closer than they were, but we must
find an agreement not between us, but all 27," said French Finance
Minister Pierre Moscovici.
His
counterpart for Luxembourg, Luc Frienden shared that sentiment. "It is
very important that any compromise solution also takes into account that all
countries in Europe have the same voice and that it cannot be that some large
states decide for the others," Frieden said.
As part of
broad plans to create a banking union, EU finance ministers had been under
pressure to create a framework for a banking supervisor by the end of the year.
Analysts had warned that a failure could send negative waves through the
financial markets.
If the
European Parliament provides its assent to the banking supervisor deal, the ECB
should begin its task of monitoring Europe's largest banks from March 2013. It
would be responsible for up to 6,000 banks from January 2014.
Such an
achievement would be one of the EU's biggest since the debt crisis began. It
could also help to snip away at the “doom loop” between debt-ridden banks and
destabilized governments.
But it
would still constitute only one chapter in the banking union saga - apart from
the banking supervisor, a resolution authority, a fund for collapsed banks and
coordinating deposit guarantee schemes to prevent bank runs will all be crucial
ingredients for a comprehensive solution to Europe's banking crisis. Building
such an architecture is likely to take several years.
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