Thursday, December 19, 2013

EU technocrats reach sovereignty crushing banking union deal

Brussels (AFP) Thursday, December 19, 2013 7:06:10 AM
France's Finance Minister Pierre Moscovici (L) speaks with EU Commissioner for Internal Market and Services Michel Barnier prior to the EU Economic and Finance Council of Ministers held in Brussels on December 18, 2013.
Thierry Charlier/AFP
France's Finance Minister Pierre Moscovici (L) speaks with EU Commissioner for Internal Market and Services Michel Barnier prior to the EU Economic and Finance Council of Ministers held in Brussels on December 18, 2013.
"Agreement by (member states)...for single resolution mechanism. Negotiations with (European Parliament) can now start," Barnier said.
The new framework means a big pooling of sovereignty and would mark a big step towards EU cross-border authority, explaining in large part why the talks have taken over a year to get this far.
France's Finance Minister Pierre Moscovici (L) speaks with Dutch Finance Minister Jeroen Dijsselbloem prior to the European Union Economic and Finance Council of Ministers held at the Lex building in Brussels on December 18, 2013.
Thierry Charlier/AFP
France's Finance Minister Pierre Moscovici (L) speaks with Dutch Finance Minister Jeroen Dijsselbloem prior to the European Union Economic and Finance Council of Ministers held at the Lex building in Brussels on December 18, 2013.
The plan is for the banks to contribute to a special fund for this purpose, phased in over 10 years, so that the taxpayer will no longer have to foot the bill.
However, the fund is unlikely to be enough in the interim period and there have been tortuous discussions over how it could find additional or "backstop" financing.
According to a draft document seen by AFP, bridge financing could come either from the member states or from the eurozone's own rescue fund, the European Stability Mechanism.
The final winding up fund -- estimated at 55 billion euros -- will also have a backstop to provide additional finance if needed, with the banking sector ultimately liable for it.
Finance ministers from the 28-country bloc were under pressure to produce a deal which EU leaders could then approve at a summit Thursday and Friday.

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