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EU commission clashes with Germany on euro-zone authority
Berlin lost no time in shooting down the commission's draft law on a common euro-zone authority.
11 July 2013, 12:00am
The European Commission proposed a supranational euro-zone authority to decide on the fate of ailing banks, even though the German government had made it clear that the power to take a bank into resolution should still lie in the hands of national authorities.
Under the proposal, an EU agency with 300 staff would be set up to supervise national regulators on ailing banks and to prepare plans to wind them down. The commission would then make the final decision on whether and when to put a bank into resolution.
The new regime would cover the roughly 6,000 banks falling under the single supervisory mechanism agreed earlier this year, which is being set up as part of the European Central Bank.
The total size of the fund would eventually be around €55 billion, equivalent to 1 percent of total deposits held by banks, according to the EU executive. However, the fund would be built up gradually over a ten-year period.
Berlin lost no time in shooting down the commission's draft law.
"This proposal gives the European Commission a competence it cannot have based on the current treaties," a German government spokesman said on Wednesday.
EU financial services commissioner Michel Barnier, who presented the proposals, dismissed suggestions that the commission text had overstepped the mark.
Barnier also rejected the idea of waiting for treaty change before pushing ahead with the completion of banking union. "We can't wait for such a change because we know what our problems are," he said.
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