Banking union: Council’s proposal is neither credible nor democratic
The adoption of a European Resolution Mechanism and the creation of a resolution Fund is an important step for the stability of the banking sector and the euro area as a whole. As part of the single market for financial services, it is a matter of co-decision between Parliament and Ministers of finance.
Liberals and Democrats believe that the proposal agreed by the European Parliament is better than the one of EU Ministers of Finance both in terms of speed and practicality as well as ensuring that the democratic rules of the Treaty are respected.
ALDE Group President Guy Verhofstadt says: “We need a faster and simpler decision-making process for considering the closure of a troubled bank. In the financial markets, speed is of the essence. The proposal of the ECOFIN is over-complex and unworkable over the space of a weekend. Only with the Commission in the driving seat, can we ensure a swift and credible system“.
As far as the Fund is concerned, President Verhofstadt continues: “The ECOFIN proposal does not properly address one of the major objectives of having a Banking Union, notably to protect taxpayer’s money. That’s why we need an earlier merging of the national funds and to start with higher contributions from banks to the fund, in relation to their risk profile, as the Parliament proposes“.
Moreover, ALDE spokesperson on the dossier Sylvie Goulard (Modem, France): “The first step of the banking union consisted in creating a single supervisor for the euro area, under the auspices of the ECB. If a bank must be resolved, the decision should be taken at the European level too, putting the European interest first. We also need a single fund and to ensure the legal soundness of the whole resolution system. By acting through an intergovernmental agreement, instead of within the legal framework of the Treaty, respecting the rights of both arms of the legislature, as originally proposed, the Council undermines not only democracy but also creates legal uncertainty“.
The European Parliament will vote its position on Thursday this week in Strasbourg, either endorsing a mandate for its negotiators to pursue an early agreement with Council, if there is sufficient good will from the latter, or to fix its own first reading position and continue the legislative procedure in the next Parliament.