EU ministers clash over banking union
Nicosia, September 16, 2012
European finance ministers clashed over plans for a banking union at a crucial meeting on Saturday, with Germany criticising the proposals to introduce a new region-wide banking supervisor by January.
Germany, which is keen to retain primary oversight for its regional savings and co-operative banks, had questioned whether the European Central Bank (ECB) should get the authority to supervise all 6,000 banks in the euro zone, arguing that it would overstretch the bank.
Leading the attack, German Finance Minister Wolfgang Schaeuble said, "Pan-European banking supervision was a necessary prerequisite for the euro zone's permanent bailout fund to directly recapitalise banks, but it is not the only one."
"We have the declaration of the heads of governments of the euro zone that European banking supervision is a necessary but not sufficient prerequisite," Schaeuble told reporters after a meeting of European Union finance ministers in Cyprus.
"The rules of the European Stability Mechanism (ESM) remain," he remarked.
Schaeuble added any country home to such banks would still need to apply for an adjustment programme through the ESM.
He reiterated it was not helpful to set a deadline for banking supervision if it may not be reached. His French counterpart Pierre Moscovici said he was convinced a deal for a joint European banking supervisor could be reached by year-end.-Reuters