News / Europe

    EU Clears Banking Union as Greece Gets Latest Bailout

    Greek Prime Minister Antonis Samaras (L) looks away as Prime Minister of Denmark Helle Thorning-Schmidt (2nd R) talks with French President Francois Hollande (R)  in Oslo, Sweden, December 10, 2012.
    Greek Prime Minister Antonis Samaras (L) looks away as Prime Minister of Denmark Helle Thorning-Schmidt (2nd R) talks with French President Francois Hollande (R) in Oslo, Sweden, December 10, 2012.
    Henry Ridgwell
    European Union finance ministers have agreed to create a single supervisory body to oversee the eurozone’s biggest banks. It is seen as the first step toward a full banking union across the single currency bloc - part of moves to try to prevent another euro debt crisis. Greece also will receive another chunk of its multi-billion-dollar bailout. But many analysts warn that the crisis is far from over

    Europe’s bailed-out banks have been dragging down the balance sheets of eurozone countries. So for months, EU leaders have been debating a banking union.

    In the early hours of Thursday morning, they went one step closer - signing a deal to create a banking supervisor whose job will be to police 200 of the eurozone’s biggest banks in an effort to prevent a repeat of the 2008 financial crisis.

    Full banking union

    French Finance Minister Pierre Moscovici was one of the first to hail the agreement. He said the accord was a success and described it as real progress that also has opened the possibility for improvements in the future.

    Europe is moving toward a full banking union across the 17 countries that use the euro, according to Spyros Economides of the London School of Economics.

    “A banking union is the first step towards fiscal integration, which is the first step towards a central political authority. Others will say no; we want a loose association, perhaps modeled on the one we’ve got now which is based on the market,” said Economides.

    The deal means that by 2014, banks with more than $39 billion of assets will be overseen by the European Central Bank, which also will grant and revoke banking licenses. In addition, the ECB will intervene in smaller banks at the first sign that they are getting into trouble. That is a significant handover of authority, said Economides.

    “I think what’s happening is there’s a big debate going on about what kind of Europe we want to see in the future. It’s not simply about this crisis; it’s about the existence of a particular kind of Europe,” he said.
     
    Money for Greece

    In a further boost for the struggling euro, finance ministers also agreed to release a $44-billion portion of bailout money to Greece, which had been on hold since June. Greek Prime Minister Antonis Samaras welcomed the news, claiming "Greece is back on its feet."

    Such a declaration is premature, said economist Sony Kapoor, director of the European policy institute Re-Define.

    “It will manage to put a little bit of balm on the wound that Greece has become. But we must remember this wound is entirely self-inflicted, and unfortunately this cycle will continue into the next year,” he said.

    Challenges ahead

    Kapoor said an opportunity was missed to properly address the eurozone’s ailing banks.

    “When the scale of the Spanish banking problems was first highlighted, we talked in abstract about breaking the link between banks and countries, where weak banks are bringing the countries down, and weak countries are bringing banks down. And we have completely failed to do that,” said Kapoor.

    EU leaders hope the banking union - or Single Supervisory Mechanism, as it is known - can be put into place without signing any new treaties. But analysts warn that many more complicated negotiations await in 2013.

    You May Like

    US, Allies Discuss Next Steps in Islamic State Fight

    Meeting comes a day after US Navy SEAL was killed while fighting Islamic State forces in northern Iraq

    In China, Traditional Banks Fight Challenge From Internet Firms

    Internet companies lent more than $150 billion to customers in 2015, which is an extremely small amount compared to the much larger lending by commercial banks last year

    Trump Faces Tough Presidential Odds Against Clinton

    Numerous national election surveys show former secretary of state defeating presumptive Republican nominee with tough talk to halt illegal immigration and temporarily block Muslims from entering country

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Press Freedom in Myanmar Fragile, Limitedi
    X
    Katie Arnold
    May 04, 2016 12:31 PM
    As Myanmar begins a new era with a democratically elected government, many issues of the past confront the new leadership. Among them is press freedom in a country where journalists have been routinely harassed or jailed.
    Video

    Video Press Freedom in Myanmar Fragile, Limited

    As Myanmar begins a new era with a democratically elected government, many issues of the past confront the new leadership. Among them is press freedom in a country where journalists have been routinely harassed or jailed.
    Video

    Video Taliban Threats Force Messi Fan to Leave Afghanistan

    A young Afghan boy, who recently received autographed shirts and a football from his soccer hero Lionel Messi, has fled his country due to safety concerns. He and his family are now taking refuge in neighboring Pakistan. VOA's Ayaz Gul reports from Islamabad.
    Video

    Video Major Rubbish Burning Experiment Captures Destructive Greenhouse Gases

    The world’s first test to capture environmentally harmful carbon dioxide gases from the fumes of burning rubbish took place recently in Oslo, Norway. The successful experiment at the city's main incinerator plant, showcased a method for capturing most of the carbon dioxide. VOA’s Deborah Block has more.
    Video

    Video EU Visa Block Threatens To Derail EU-Turkey Migrant Deal

    Turkish citizens could soon benefit from visa-free travel to Europe as part of the recent deal between the EU and Ankara to stem the flow of refugees. In return, Turkey has pledged to keep the migrants on Turkish soil and crack down on those who are smuggling them. Brussels is set to publish its latest progress report Wednesday — but as Henry Ridgwell reports from London, many EU lawmakers are threatening to veto the deal over human rights concerns.
    Video

    Video Tensions Rising Ahead of South China Sea Ruling

    As the Philippines awaits an international arbitration ruling on a challenge to China's claims to nearly all of the South China Sea, it is already becoming clear that regardless of which way the decision goes, the dispute is intensifying. VOA’s Bill Ide has more from Beijing.
    Video

    Video Painting Captures President Lincoln Assassination Aftermath

    A newly restored painting captures the moments following President Abraham Lincoln’s assassination in 1865. It was recently unveiled at Ford’s Theatre in Washington, where America’s 16th president was shot. It is the only known painting by an eyewitness that captures the horror of that fateful night. VOA’s Julie Taboh tells us more about the painting and what it took to restore it to its original condition.
    Video

    Video Elephant Summit Results in $5M in Pledges, Presidential Support

    Attended and supported by three African presidents, a three-day anti-poaching summit has concluded in Kenya, resulting in $5 million in pledges and a united message to the world that elephants are worth more alive than dead. The summit culminated at the Nairobi National Park with the largest ivory burn in history. VOA’s Jill Craig attended the summit and has this report about the outcomes.
    Video

    Video Displaced By War, Syrian Artist Finds Inspiration Abroad

    Saudi-born Syrian painter Mohammad Zaza is among the millions who fled their home for an uncertain future after Syria's civil war broke out. Since fleeing Syria, Zaza has lived in Lebanon, Egypt, Jordan and now Turkey where his latest exhibition, “Earth is Blue like an Orange,” opened in Istanbul. He spoke with VOA about how being displaced by the Syrian civil war has affected the country's artists.
    Video

    Video Ethiopia’s Drought Takes Toll on Children

    Ethiopia is dealing with its worst drought in decades, thanks to El Nino weather patterns. An estimated 10 million people urgently need food aid. Six million of them are children, whose development may be compromised without sufficient help, Marthe van der Wolf reports for VOA from the Metahara district.
    Video

    Video Little Havana - a Slice of Cuban Culture in Florida

    Hispanic culture permeates everything in Miami’s Little Havana area: elderly men playing dominoes as they discuss politics, cigar rollers deep at work, or Cuban exiles talking with presidential candidates at a Cuban coffee window. With the recent rapprochement between Cuba and United States, one can only expect stronger ties between South Florida and Cuba.
    Video

    Video California Republicans Weigh Presidential Choices Amid Protests

    Republican presidential candidates have been wooing local party leaders in California, a state that could be decisive in selecting the party's nominee for U.S. president. VOA's Mike O’Sullivan reports delegates to the California party convention have been evaluating choices, while front-runner Donald Trump drew hundreds of raucous protesters Friday.
    Video

    Video ‘The Lights of Africa’ - Through the Eyes of 54 Artists

    An exhibition bringing together the work of 54 African artists, one from each country, is touring the continent after debuting at COP21 in Paris. Called "Lumières d'Afrique," the show centers on access to electricity and, more figuratively, ideas that enlighten. Emilie Iob reports from Abidjan, the exhibition's first stop.

    Special Report

    Adrift The Invisible African Diaspora