SUZANNE LYNCH
Germany is ready to compromise over outstanding details of disputed European rules on bank resolution, but still opposes access to unlimited public money to wind up struggling financial institutions.
At a closed-door meeting on Friday in Berlin, finance minister Wolfgang Schäuble indicated to a group of EU colleagues that he would drop his opposition to the European Commission being empowered to close struggling banks under EU oversight. However, Germany is still opposed to a common resolution fund to finance restructuring of banks – a key strand of the commission’s proposed Single Resolution Mechanism.
Pressure to reach a deal
The meeting,
attended by head of the eurogroup Jeroen Dijsselbloem, EU commissioner for Internal Market and Services Michel Barnier and the finance ministers of France, Spain and Italy, was convened ahead of tomorrow's Ecofin meeting in Brussels, with finance ministers under pressure to secure agreement before the end of the year.
Officials who attended the meeting in Berlin indicated that a shift from Germany’s perspective is possible only if a binding guarantee is given that bank resolution requiring public money would still require backing by EU heads of state and government.
The commission had proposed a €55 billion fund, financed by bank levies, which would replace national resolution funds.
German insistence
While German officials insist that agreement has yet to be reached
, Mr Schäuble has already indicated he was anxious to have this chapter of the new banking union agreed by the end of the year.
Throughout the debate, Germany has insisted the final word on winding up European banks must rest with EU leaders in the European Council. One possible compromise discussed on Friday would give the commission competence over bank resolutions requiring no significant public funding – from euro zone states or the ESM bailout fund.
Officials indicated that Berlin was willing to compromise on the scope of the project, with Brussels expecting all 6,000 euro zone banks to be covered by the single resolution regime.
Mr Schäuble signalled last week that he still views as problematic the legal framework for financing a resolution fund. As an alternative, Berlin wants rules for financing the fund bedded down in article 352 of the European treaties.
