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

    Syrian Torture Victim Recounts Horrors

    'You make them think you have surrendered' says Jalal Nofal, a doctor who was jailed and survived repeated interrogations in Syria

    Mandela’s Millions Paid to Heirs, But Who Gets His Country Home?

    Saga around $3 million estate of country's first democratic president is far from over as Winnie Mandela’s fight for home overshadows payouts

    Guess Which Beach is 'Best in the US'?

    Hawaii’s Hanauma Bay tops an annual "top 10" list compiled by a coastal scientist, also known as Doctor Beach

    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.
    Chinese-Americans Heart Trump, Bucking National Trendi
    X
    May 27, 2016 5:57 AM
    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Chinese-Americans Heart Trump, Bucking National Trend

    A new study conducted by three Asian-American organizations shows there are three times as many Democrats as there are Republicans among Asian-American voters, and they favor Hillary Clinton over Donald Trump. But one group, called Chinese-Americans For Trump, is going against the tide and strongly supports the business tycoon. VOA’s Elizabeth Lee caught up with them at a Trump rally and reports from Anaheim, California.
    Video

    Video Reactions to Trump's Success Polarized Abroad

    What seemed impossible less than a year ago is now almost a certainty. New York real estate mogul Donald Trump has won the number of delegates needed to secure the Republican presidential nomination. The prospect has sparked as much controversy abroad as it has in the United States. Zlatica Hoke has more.
    Video

    Video Drawings by Children in Hiroshima Show Hope and Peace

    On Friday, President Barack Obama will visit Hiroshima, Japan, the first American president to do so while in office. In August 1945, the United States dropped an atomic bomb on the city to force Japan's surrender in World War II. Although their city lay in ruins, some Hiroshima schoolchildren drew pictures of hope and peace. The former students and their drawings are now part of a documentary called “Pictures from a Hiroshima Schoolyard.” VOA's Deborah Block has the story.
    Video

    Video Vietnamese Rapper Performs for Obama

    A prominent young Vietnamese artist told President Obama said she faced roadblocks as a woman rapper, and asked the president about government support for the arts. He asked her to rap, and he even offered to provide a base beat for her. Watch what happened.
    Video

    Video Roots Run Deep for Tunisia's Dwindling Jewish Community

    This week, hundreds of Jewish pilgrims are defying terrorist threats to celebrate an ancient religious festival on the Tunisian island of Djerba. The festivities cast a spotlight on North Africa's once-vibrant Jewish population that has all but died out in recent decades. Despite rising threats of militant Islam and the country's battered economy, one of the Arab world's last Jewish communities is staying put and nurturing a new generation. VOA’s Lisa Bryant reports.
    Video

    Video Meet Your New Co-Worker: The Robot

    Increasing numbers of robots are joining the workforce, as companies scale back and more processes become automated. The latest robots are flexible and collaborative, built to work alongside humans as opposed to replacing them. VOA’s Tina Trinh looks at the next generation of automated employees helping out their human colleagues.
    Video

    Video Wheelchair Technology in Tune With Times

    Technologies for the disabled, including wheelchair technology, are advancing just as quickly as everything else in the digital age. Two new advances in wheelchairs offer improved control and a more comfortable fit. VOA's George Putic reports.
    Video

    Video Baby Boxes Offer Safe Haven for Unwanted Children

    No one knows exactly how many babies are abandoned worldwide each year. The statistic is a difficult one to determine because it is illegal in most places. Therefore unwanted babies are often hidden and left to die. But as Erika Celeste reports from Woodburn, Indiana, a new program hopes to make surrendering infants safer for everyone.
    Video

    Video California Celebration Showcases Local Wines, Balloons

    Communities in the U.S. often hold festivals to show what makes them special. In California, for example, farmers near Fresno celebrate their figs and those around Gilmore showcase their garlic. Mike O'Sullivan reports that the wine-producing region of Temecula offers local vintages in an annual festival where rides on hot-air balloons add to the excitement.
    Video

    Video US Elementary School Offers Living Science Lessons

    Zero is not a good score on a test at school. But Discovery Elementary is proud of its “net zero” rating. Net zero describes a building in which the amount of energy provided by on-site renewable sources equals the amount of energy the building uses. As Faiza Elmasry tells us, the innovative features in the building turn the school into a teaching tool, where kids can't help but learn about science and sustainability. Faith Lapidus narrates.

    Special Report

    Adrift The Invisible African Diaspora

    World Currencies

    EUR
    USD
    0.8954
    JPY
    USD
    110.07
    GBP
    USD
    0.6802
    CAD
    USD
    1.2932
    INR
    USD
    67.080

    Rates may not be current.