GUE/NGL
News

Bank resolution mechanism

Brussels, 16/01/2014 (Agence Europe) – The European Parliament still has steam coming out of its ears. It says the introduction of a single bank resolution mechanism (SRM) must be done exclusively with the Community method, but under pressure from Germany, member states are taking an intergovernmental approach to the SRM.

The Conference of Presidents of the EP's political groupings has decided to write to the president of the European Commission to win his backing on this issue on Thursday 16 January, before the second meeting of the inter-governmental conference (IGC) responsible for drawing up the treaty that will decide how contributions from banks will be collected at national level and kept in national compartments in the bank resolution fund, which will gradually be pooled over a ten-year transition period (see EUROPE 10993).

On Wednesday, Elisa Ferreira (S&D, Portugal), Corien Wortmann-Kool (EPP, Netherlands), Sharon Bowles (ADLE, United Kingdom), Sylvie Goulard (ADLE, France), Sven Giegold (Greens/EFA, Germany) and Thomas Händel (GUE/NGL, Germany), all of whom are active in the EP negotiations over the SRM, told the Greek Presidency that they strongly disagree with the intergovernmental approach that unilaterally rejects the usual legislative process for fundamental aspects of the draft legislation. They say that there is no legal argument to justify that the transition period during which the SRM fund would be built up should be dealt with outside the Community method. A parliamentary source said that, when the governments are asked for legal or technical explanations, they are never provided and it is clear that it is all a matter of politics.

Not wanting to close any avenues with the member states, the MEPs have agreed to be simple observers at the IGC. It will provide them with a way of reiterating their opposite to the intergovernmental approach that they say prevents the creation of a genuinely common fund, infringes equal treatment of all banks by not ensuring non-discriminatory access to all bank wind-up funds, including the SRM fund, and creates obstacles to a speedy decision-making process.

So will MEPs take an extreme line by adopting in first reading the SRM position of the EP's committee that is exclusively based on the Community method? The Conference of Presidents reserves the right to do so if the negotiations do not take place in a constructive manner. The source says that the MEPs are not being dogmatic about it and if they are persuaded that the proposal would help destroy the connection between bank problems and sovereign debt problems and ensure equal treatment for all banks, then the EP would study the question.

At the Council of Ministers, people implicitly admit that Germany fears that the German constitutional court in Karlsruhe will rule that the legal basis for the SRM (Article 114 of the EU treaty, Single Market) is not good enough. A diplomat says that all agree that in the “medium-term”, the treaty will have to join the Community system.