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

Lesotho Faces New Round of Violence, Political Crisis

Brutal killing of military officer has sent former leaders back into S. Africa where they're watching anxiously as regional officials head in to try to restore peace More

Video VOA EXCLUSIVE: US Diplomat Expects Adoption of Bosnian Massacre Anniversary Resolution

Samantha Power says there's broad consensus about killings in Bosnia's war, but Russia calls resolution 'divisive,' backs UN countermeasure More

UN Report Exposes Widespread Boko Haram Atrocities

Damning report graphically details pattern of vicious, widespread atrocities committed by Islamist militants More

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.
Olympics Construction Scars Sacred Korean Mountaini
X
July 02, 2015 4:10 AM
Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Olympics Construction Scars Sacred Korean Mountain

Environmentalists in South Korea are protesting a Winter Olympics construction project to build a ski slope through a 500-year-old protected forest. Brian Padden reports that although there is strong national support for hosting the 2018 Pyeongchang Winter Olympics, there are growing public concerns over the costs and possible ecological damage at the revered mountain.
Video

Video Xenophobia Victims in South Africa Flee Violence, Then Return

Many Malawians fled South Africa early this year after xenophobic attacks on African immigrants. But many quickly found life was no better at home and have returned to South Africa – often illegally and without jobs, and facing the tough task of having to start over. Lameck Masina and Anita Powell file from Johannesburg.
Video

Video Family of American Marine Calls for Release From Iranian Prison

As the crowd of journalists covering the Iran talks swells, so too do the opportunities for media coverage.  Hoping to catch the attention of high-level diplomats, the family of American-Iranian marine Amir Hekmati is in Vienna, pleading for his release from an Iranian prison after nearly 4 years.  VOA’s Heather Murdock reports from Vienna.
Video

Video UK Holds Terror Drill as MPs Mull Tunisia Response

After pledging a tough response to last Friday’s terror attack in Tunisia, which came just days before the 10th anniversary of the bomb attacks on London’s transport network, British security services are shifting their focus to overseas counter-terror operations. VOA's Henry Ridgwell has more.
Video

Video Obama on Cuba: This is What Change Looks Like

President Barack Obama says the United States will soon reopen its embassy in Cuba for the first time since 1961, ending a half-century of isolation. VOA White House correspondent Luis Ramirez reports.
Video

Video Hate Groups Spread Influence Via Internet

Hate groups of various kinds are using the Internet for propaganda and recruitment, and a Jewish human rights organization that monitors these groups, the Simon Wiesenthal Center, says their influence is growing. The messages are different, but the calls to hatred or violence are similar. VOA's Mike O’Sullivan reports.
Video

Video US Silica Sand Mining Surge Worries Illinois Residents, Businesses

Increased domestic U.S. oil and gas production, thanks to advances known as “fracking,” has created a boom for other industries supporting that extraction. Demand for silica sand, used in fracking, could triple over the next five years. In the Midwest state of Illinois, people living near the mines are worried about how increased silica sand mining will affect their businesses and their health. VOA’s Kane Farabaugh has more in this first of a series of reports.
Video

Video Blind Somali Journalist Defies Odds in Mogadishu

Despite improving security in the last few years, Somalia remains one of the most dangerous countries to be a journalist – even more so for someone who cannot see. Abdulaziz Billow has the story of journalist Abdifatah Hassan Kalgacal, who has been reporting from the Somali capital for the last decade despite being blind.
Video

Video Texas Defies Same-Sex Marriage Ruling

Texas state officials have criticized the US Supreme Court decision giving same-sex couples the right to marry nationwide. The attorney general of Texas says last week's decision did not overrule constitutional "rights of religious liberty," and therefore officials performing wedding services can refuse to perform them for same-sex couples if it is against their religious beliefs. Zlatica Hoke reports on the controversy.
Video

Video Rabbi Hits Road to Heal Jewish-Muslim Relations in France

France is on high alert after last week's terrorist attack near the city Lyon, just six months after deadly Paris shootings. The attack have added new tensions to relations between French Jews and Muslims. France’s Jewish and Muslim communities also share a common heritage, though, and as far as one French rabbi is concerned, they are destined to be friends. From the Paris suburb of La Courneuve, Lisa Bryant reports about Rabbi Michel Serfaty and his friendship bus.
Video

Video Saudi Leaks Expose ‘Checkbook Diplomacy’ In Battle With Iran

Saudi Arabia’s willingness to wield its oil money on the global diplomatic stage appears to have been laid bare, after the website WikiLeaks published tens of thousands of leaked cables from Riyadh’s Ministry of Foreign Affairs. VOA's Henry Ridgwell reports.
Video

Video In Kenya, Police Said to Shoot First, Ask Questions Later

An organization that documents torture and extrajudicial killings says Kenyan police were responsible for 1,252 shooting deaths in five cities, including Nairobi, between 2009 and 2014, representing 67 percent of all gun deaths in the areas reviewed. Gabe Joselow has more from Nairobi.

VOA Blogs