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.

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.

More in World
roderick degiorgio
I was thinking years ago,I could see it all coming FEDERAL EUROPE GOVERNMENT.
While national and cultural diversity can be viewed as a source of strength, narrow nationalism is likely to constitute the main obstacle to the European integration project. The ongoing crisis highlights the challenges over the establishment of single/common european: • single market with one monetary and currency • foreign policy ? • external border and defence ?? • Language ??? European Unionists and Federalists architects will continue to argue over these main challenging issues that will determine the fate of the European integration process. The mastering of these issues constitute the comparative advantage of the USA and other geopolitical hegemons such as China, Russia, Australia, Japan.

Get access to the real stories first with the digital edition