Noonan confident about failed banks deal
FINANCE Minister Michael Noonan has said he is optimistic agreement can be reached on a mechanism to wind up failed banks when his EU colleagues meet tomorrow.
Speaking at the European Parliament in Brussels, Mr Noonan said he adjourned marathon talks last Friday because they were "running out of time" rather than due to issues which were impossible to resolve.
While Mr Noonan yesterday claimed lack of time, almost every other account suggested that Germany and France are at odds on how to distribute the costs. EU leaders have asked for a deal on the directive by Thursday and talks have been scheduled tomorrow.
Any slippage could further set back the banking union project. Ever since banking union started to take shape in mid-2012, Germany has been wary, concerned that as the currency union's largest and most powerful economy, it will end up on the hook for other countries' debts if a single, EU-wide system for sorting out problems is put in place.
While there is no immediate deadline for an agreement, the risk of a negative market reaction to another failure has been growing since the US Federal Reserve made clear that it might not be printing any more money by this time next year.
The talks are difficult because the crucial part of the directive describing who pays for rescuing or closing a bank will set a model for all future bank rescues or closures in the EU and become the basis of two other key pieces of legislation.
The first piece – guidelines for the eurozone bailout fund on saving a bank from collapse – will only become legally valid when the directive is agreed with the European Parliament.