News / Economy

    Spain, Portugal Push for Full Banking Union

    Spain's Prime Minister Mariano Rajoy, right, and Portugal's Prime Minister Pedro Passos Coelho, left, during a press conference at the Moncloa Palace in Madrid, May 13, 2013
    Spain's Prime Minister Mariano Rajoy, right, and Portugal's Prime Minister Pedro Passos Coelho, left, during a press conference at the Moncloa Palace in Madrid, May 13, 2013
    Reuters
    Spain and Portugal called on Monday for the eurozone to complete a banking union as Germany underscored legal hurdles before a central element of the plan to deal with failing banks can be introduced.
     
    “It is indispensable that we stick to the agreed calendar on banking union and that we take steps to make sure families and small companies receive credit,” Spanish Prime Minister Mariano Rajoy told reporters.
     
    “Banking union is the credibility test of the European Union,” he said, after meeting Portuguese Prime Minister Pedro Passos Coelho, who backed his calls for progress on Europe's most ambitious reform of the financial crisis.
     
    The call came as finance ministers from the eurozone met in Brussels, ahead of which German Finance Minister Wolfgang Schaeuble reiterated the need for a change to EU treaties to underpin the new system of bank resolution.

    “When a bank is wound up, money and jobs are usually lost. Those affected will seek redress. If there is an activity that needs a solid legal base, it is resolution,” he wrote in an article in the Financial Times on Monday.
     
    To avoid treaty change and have a banking union “of sorts” Schaeuble proposed to stick for now to the intermediate stage of a coordinated network of national resolution authorities, rather than a new EU resolution authority.
     
    “This would be a timber-framed, not a steel-framed, banking union,” Schaeuble wrote.
     
    Most eurozone countries and institutions believe a full banking union, which would help deal with banking crises, is needed urgently to restore investor confidence.
     
    Under the plan, the biggest banks will be supervised by the European Central Bank from the middle of next year. There is also to be a single bank resolution mechanism that would wind down insolvent banks. Plans for a common deposit guarantee scheme are unlikely to happen any time soon.
     
    But while the ECB bank supervision looks set to take effect as planned, the single authority that would order and finance the closure of a bank is unlikely to materialize soon, because Germany believes it needs a change to the EU treaty.
     
    Some were sympathetic to this message.

    "Many of the building blocks for the banking union can be put in place. The issue of the treaty change can be addressed later on,'' Jeroen Dijsselbloem, the Eurogroup chairman, told reporters before the ministerial meeting.
     
    “I think the Germans are putting forward understandable questions, which will have to be dealt with. But I don't see why that should stop us making progress on banking union,” he said.
     
    But the issue is divisive because a change to the European Union treaty could take years and entails risks - the revised law could be rejected in one of the 27 national EU parliaments during ratification.
     
    Push Back
     
    Some policy-makers believe Germany is demanding treaty change to push the discussion on bank resolution back until after its parliamentary elections in September, in which Chancellor Angela Merkel will have to deal with rising popular discontent with bailing out eurozone banks and governments.
     
    “You do not need treaty change for banking resolution, it can be done under the existing rules,” one EU diplomat said. “Germany is erecting barriers to slow down the process, but that is a political decision, not a technical one.”
     
    France too called for rapid progress.
     
    “We need to go fast, as fast as possible, and have a global banking union,” French Finance Minister Pierre Moscovici told reporters before the eurozone finance ministers meeting.
     
    “Mr. Schaeuble says we need to go as far as possible with the existing treaty, and if there are problems in order to change the treaties, we'll see. I do agree with that with maybe a little nuance that I believe that we can go very, very far with the existing treaty and maybe, a second thing, I am convinced that we need an integrated authority,” Moscovici said.

    You May Like

    Video Rubio Looks to Surge in New Hampshire

    Republican presidential candidate has moved into second place in several recent surveys and appears to be gaining ground on longtime frontrunner Donald Trump

    UN Calls for Global Ban on Female Genital Mutilation

    Recent UNICEF report finds at least 200 million girls and women alive today have undergone female genital mutilation in 30 countries

    UN Pilots New Peace Approach in CAR

    Approach launched in northern town of Kaga Bandoro, where former combatants of mainly Muslim Seleka armed group and Christian and animist anti-Balaka movement are being paid to do community work

    This forum has been closed.
    Comment Sorting
    Comments
         
    by: Richard from: White
    May 15, 2013 3:01 AM
    Not so optimistic, unfortunately... Here also can be added non optimistic situation with employment in EU. Looking to the near future, the EU labor market is expected to weaken further, reflecting the usually delayed response to changes in economic activity. The latest readings of European Commission surveys suggest a deterioration of the labor market conditions with additional job losses and rising unemployment in the short term.

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    German Artists to Memorialize Refugees With Life Jacket Exhibiti
    X
    Hamada Elsaram
    February 05, 2016 4:30 PM
    Sold in every kind of shop in some Turkish port towns, life jackets have become a symbol of the refugee crisis that brought a million people to Europe in 2015.  On the shores of Lesbos, Greece, German artists collect discarded life jackets as they prepare an art installation they plan to display in Germany.  For VOA, Hamada Elrasam has this report from Lesbos, Greece.
    Video

    Video German Artists to Memorialize Refugees With Life Jacket Exhibit

    Sold in every kind of shop in some Turkish port towns, life jackets have become a symbol of the refugee crisis that brought a million people to Europe in 2015.  On the shores of Lesbos, Greece, German artists collect discarded life jackets as they prepare an art installation they plan to display in Germany.  For VOA, Hamada Elrasam has this report from Lesbos, Greece.
    Video

    Video E-readers Help Ease Africa's Book Shortage

    Millions of people in Africa can't read, and there's a chronic shortage of books. A non-profit organization called Worldreader is trying to help change all that one e-reader at a time. VOA’s Deborah Block tells us about a girls' school in Nairobi, Kenya where Worldreader is making a difference.
    Video

    Video Genius Lets World Share Its Knowledge

    Inspired by crowdsourcing companies like Wikipedia, Genius allows anyone to edit anything on the web, using its web annotation tool
    Video

    Video Former Drug CEO Martin Shkreli Angers US Lawmakers

    A former U.S. pharmaceutical business executive has angered lawmakers by refusing to explain why he raised the price of a life-saving pill by 5,000 percent. Martin Shkreli was removed from a congressional hearing on Thursday after citing his Fifth Amendment right to stay silent. Zlatica Hoke has more.
    Video

    Video Super Bowl TV Commercials are Super Business for Advertisers

    The Super Bowl, the championship clash between the two top teams in American Football, is the most-watched sporting event of the year, and advertisers are lining up and paying big bucks to get their commercials on the air. In fact, the TV commercials during the Super Bowl have become one of the most anticipated and popular features of the event. VOA's Brian Allen has a sneak peek of what you can expect to see when the big game goes to commercial break, and the real entertainment begins.
    Video

    Video In Philippines, Mixed Feelings About Greater US Military Presence

    In the Philippines, some who will be directly affected by a recent Supreme Court decision clearing the way for more United States troop visits are having mixed reactions.  The increased rotations come at a time when the Philippines is trying to build up its military in the face of growing maritime assertiveness from China.  From Bahile, Palawan on the coast of the South China Sea, Simone Orendain has this story.
    Video

    Video Microcephaly's Connection to Zika: Guilty Until Proven Innocent

    The Zika virus rarely causes problems for the people who get it, but it seems to be having a devastating impact on babies whose mothers are infected with Zika. VOA's Carol Pearson has more.
    Video

    Video Solar Innovation Provides Cheap, Clean Energy to Kenya Residents

    In Kenya, a company called M-Kopa Solar is providing clean energy to more than 300,000 homes across East Africa by allowing customers to "pay-as-you-go" via their cell phones. As Lenny Ruvaga reports from Kangemi, customers pay a small deposit for a solar unit and then pay less than a dollar a day to get clean energy to light up their homes or businesses.
    Video

    Video Stunning Artworks Attract Record Crowds, Thanks to Social Media

    A new exhibit at the oldest art museum in America is shattering attendance records. Thousands of visitors are lining up to see nine giant works of art that have gotten a much-deserved shot of viral marketing. The 150-year-old Smithsonian American Art Museum has never had a response quite like this. VOA's Julie Taboh reports.
    Video

    Video Apprenticeships Put Americans on Path Back to Work

    Trying to get more people into the U.S. workforce, the Obama administration last year announced $175 million in grants towards apprenticeship programs. VOA White House correspondent Aru Pande went inside one training center outside of Washington that has gained national recognition for helping put people on the path to employment.
    Video

    Video New Material May Reduce Concussion Effects

    As the 2016 National Football League season reaches its summit at the Super Bowl this coming Sunday (2/7), scientists are trying to learn how to more effectively protect football players from dangerous and damaging concussions. Researchers at Cardiff and Cambridge Universities say their origami-based material may solve the problem. VOA’s George Putic reports.
    Video

    Video Saudi Arabian Women's Sports Chip Away at Stereotypes

    Saudi Arabian female athletes say that sports are on the front line of busting traditions that quash women’s voices, both locally and internationally. In their hometown of Jeddah, a group of basketball players say that by connecting sports to health issues, they are encouraging women and girls to get out of their homes and participate in public life. VOA’s Heather Murdock reports.
    Video

    Video A Year Later, Fortunes Mixed for Syrians Forging New Lives in Berlin

    In April of last year, VOA followed the progress of six young Syrian refugees -- four brothers and their two friends -- as they made their way from Libya to Italy by boat, and eventually to Germany. Reporter Henry Ridgwell caught up with the refugees again in Berlin, as they struggle to forge new lives amid the turmoil of Europe's refugee crisis.
    Video

    Video Zika Virus May be Hard to Stop

    With the Zika virus spreading rapidly, the World Health Organization Monday declared Zika a global health emergency. As Alberto Pimienta reports, for many governments and experts, the worst is yet to come.

    World Currencies

    EUR
    USD
    0.8926
    JPY
    USD
    116.68
    GBP
    USD
    0.6871
    CAD
    USD
    1.3751
    INR
    USD
    67.653

    Rates may not be current.