Ministers hold extra talks to hammer out EU bank deal
EUROPEAN finance ministers will hold an extra meeting in Brussels next week in an attempt to push through a compromise deal on sharing bank failure costs as a year-end deadline looms.
In more than 15 hours of talks that ended inconclusively early yesterday in Brussels, ministers sketched out a compromise that European Parliament leaders says keeps too much power in national capitals and undermines EU law.
The ministers will return for a meeting ahead of a two-day European Summit kicking off on December 19 in a bid to hammer out a deal.
After the meeting yesterday, eurogroup chair and Dutch Finance Minister Jeroen Dijsselbloem (pictured) said many issues remained to be resolved.
"There's a lot of issues, a lot of technical issues we have to work on," he said.
The key to a compromise lies in overcoming German objections to a centrally controlled bank-resolution fund that exposes taxpayers to too much risk of paying for failed lenders.
Under the finance ministers' roadmap, a central fund financed by banks would be phased in over 10 years; each country would retain veto power in that time.
EU financial-services chief Michel Barnier and finance ministers including Wolfgang Schaeuble of Germany said the bank- failure talks laid the foundations for a summit agreement.
Still, Finland's Jutta Urpilainen underscored the divisions that have plagued the process that began in June last year to build a so-called banking union.
"This is a package, so nothing is agreed until everything is agreed, so we can say everything is in a way open," Mr Urpilainen said.
The ministers also moved toward amending Mr Barnier's plan for the European Commission to be the key decision-taker in the SRM with a system in which the Council of the European Union would have more of a say -- a key German demand.
Germany has led the opposition to Barnier's plan.
The new draft plan would also introduce safeguards into the planned central fund so that national contributions would merge only gradually into a central pot.
Under this approach, nations would each have a compartment in the fund into which their banks would pay levies, with limits on the cross-border use of the money to be steadily withdrawn over 10 years.