BANKING: EP bangs fist on bank resolution scheme negotiating table
Brussels, 06/12/2013 (Agence Europe) – On Thursday 6 February, the European Parliament confirmed by a large majority the negotiating mandate for the EP negotiators in talks with the Greek Presidency over the single bank resolution mechanism (SRM). It demands the holding of a special Ecofin Council meeting next week before the one scheduled for Tuesday 18 February.
Is the European Parliament's bark worse than its bite? In order to flex its muscles in this crucial issue for banking union and encourage the member states to change their views and give the Greek Presidency a new negotiating mandate, the most important thing is to speak with one voice, and the EP has been doing this. The MEPs confirmed the negotiating mandate for their negotiators the day after a three-hour trialogue meeting in Strasbourg which did not achieve anything much.
Corien Wortmann-Kool (EPP, the Netherlands) said the EP was sending out a message of unity and ringing the alarm bell at the Council of Ministers because it is a matter of life and death. She said the vote did not end the first reading under the co-decision procedure in order not to delay the negotiations. Hannes Swoboda (S&D, Austria) said the EP wanted a solution, but not the Council of Ministers' solution, and MEPs want the ministers to quickly grant the Greek Presidency a different mandate. Do we have to wait a fortnight before the Greeks get a new mandate, asked the head of the Liberal Group, Guy Verhofstadt (Belgium). There have already been three trialogue meetings where the Greek Presidency has not been given a negotiating mandate that goes any further than the Council's position, lamented Sharon Bowles (ALDE, United Kingdom). Bowles has made suggestions herself that go beyond the EP's negotiating position. She underlined that co-decision meant incorporating the best of the two positions.
The main aim for the single bank resolution scheme in the eurozone is to protect taxpayers' money when a bank goes under and to put each bank on an equal footing, irrespective of its country of origin. Only an approach using the Community method (under Article 114, the single market, of the EU treaty that guarantees the EP co-decision powers) can achieve this, according to the EP. The Council of Ministers is following Germany's demand that an intergovernmental approach be taken to establish part of the single resolution fund (SRF) that banks will contribute to and which will gradually be pooled.
Daniel Cohn-Bendit (Greens/EFA, Germany) said this was private money and states should not plant their flag on the mechanism.
The only reason for an intergovernmental agreement is to keep control, pointed out Swoboda, adding that the banks are increasingly European in nature and a European solution was needed.
The first years of the SRF will be crucial for its credibility. MEPs feel that the SRF must be able to borrow right from the start so that it has sufficient war chests. In order to minimise political interference and encourage rapid decision-making when a bank needs to be wound up, the MEPs say the European Commission should have the final say.
The EP's unity may not suffice to get the ministers to change tack. Will the EP be prepared to go as far as rejecting what it sees as a bad agreement, with the risk that this part of banking union would not be agreed upon ahead of the European elections in May? The EP feels optimistic about its ability to get the Council to change tack ahead of the elections, but it has its work cut out for it.
The Council of Ministers is not in any hurry and the closer we get to the elections, the more it will feel that it is going to win, said Cohn-Bendit, arguing that the only way to win was for the EP to say over and over again that no solution is better than a bad solution and that there will not be a solution that is not based on the Community method because the Community method protects citizens from banks' interests and this is something to fight over in the election campaign. Wortmann-Kool hoped agreement would be reached before the European elections, but not at any price. On behalf of the GUE/NGL Group, Gabriele Zimmer (Germany) called for the EP to make it clear that it would not allow itself to be influenced by the pressure of time.
The head of the Ecofin Council, Yiannis Stournaras, said on the Greek Presidency's website: “We take note of the vote today by the European Parliament. The SRM is one of the key elements of Europe's banking union. All parties involved should now move ahead with reinforced vigour to adopt the legislation before the end of the parliamentary term. The Council has indicated its flexibility and willingness to discuss all issues in an open manner and in a spirit of compromise”. Consultations were taking place in Athens and Brussels on how to respond to the EP's demands.
The Commission wants a credible, workable agreement, said Internal Market Commissioner Michel Barnier. He said Article 114 of the treaty was the right legal basis for the SRM, and the Commission's legal department says using an intergovernmental agreement does not flout the treaty as long as it exclusively covers the transfer and pooling of funds. If the EP is prepared to compromise on this highly sensitive point, he said, the Council would have to accept the consequences in all other areas of the negotiations, he said (see EUROPE 11011). (MB/transl.fl)