MEPs take a strong line on bank fund
Member states warned that MEPs will refuse to give final say over winding-up banks to national politicians.
MEPs today (17 December) backed the European Commission’s proposal for a single bank resolution authority and fund, and warned EU member states that any plans to rewrite the proposal would meet stiff resistance.
MEPs on the committee for economic and monetary affairs said that the Commission and not the member states should decide whether to wind-up ailing banks, although they reduced the Commission’s margin of discretion to disagree with recommendations made by the resolution authority’s board.
“The [European Union] method is the only method to be used in this procedure,” Elisa Ferreira, a Portuguese centre-left MEP who is leading the European Parlaiment’s work on the issue, said. “There will be no Council or political entity deciding on the outcome of a bank.”
MEPs also agreed that the resolution fund, which is to be funded by levies paid by banks, should be able to draw loans from EU funds until it is fully capitalised, and that MEPs should have the power to appoint the chief executive of the resolution board.
In July, the Commission proposed creating a single EU bank resolution authority and fund with the power to rescue or wind-up ailing banks. The single resolution mechanism is an integral part of the EU’s planned banking union.
Finance ministers will tonight resume negotiations on their position on the issue.
Under a broad political agreement struck last Wednesday, member states would negotiate an inter-governmental agreement to create the resolution fund, rather than go through the EU legislative process. They would also give final say over decisions on resolving ailing banks to member states’ finance ministers.
EU leaders said in November that they would agree a common position before the end of 2013, to allow time to negotiate an agreement with MEPs before the end of the parliamentary term in April.
But MEPs were very strong in their warnings to member states not to dilute the Commission’s proposal, repeatedly saying that no deal was better than a bad deal.
Sharon Bowles, a British liberal MEP who chairs the economic and monetary affairs committee, warned that there would be an “inter-institutional battle” if member states opt for the procedure and decision-making process that they are currently discussing.
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“I am dusting off my procedural toolkit to uphold the views of Parliament,” she said.
“A grand coalition within the Parliament is now facing a conflict with the grand coalition of the German government,” said Sven Giegold, a German Green MEP and member of the committee.