ECB should have powers to intervene in banks - Barroso

EUROPEAN PARLIAMENT:The European Central Bank should have the powers to intervene in any euro area bank, European Commission president José Manuel Barroso has said.

EU leaders agreed last week to adopt a legal framework by the end of the year giving Frankfurt overall responsibility to supervise euro zone banks.

The introduction of these new ECB powers is a precondition for direct European Stability Mechanism aid to banks.

Addressing the European Parliament in Strasbourg yesterday, Mr Barroso said the plan to deliver a single supervisory mechanism would send an important signal to investors and the EU’s international partners.

He also urged MEPs to back new rules that would give the commission greater oversight of national budgets.

Approval of the budgetary oversight rules, known as the two-pack, were crucial to improving the economic governance in the euro zone, he said.

The EU was advancing in its response to the financial crisis but “not all countries felt the same degree of urgency”.

He warned the “negative link” between bank debt and sovereign debt still needed to be “definitively” broken.