http://www.bloomberg.com/news/2013-11-04/eu-lawmakers-seek-public-loan-backstop-for-euro-area-bank-plan.html
Key European Union lawmakers say a planned euro-area system for handling failing lenders should have access to public money until a common resolution fund is filled by levies on the banking industry.
Key European Union lawmakers say a planned euro-area system for handling failing lenders should have access to public money until a common resolution fund is filled by levies on the banking industry.
EU lawmaker Elisa Ferreira, who’s in charge of guiding the
European Commission’s plan for a Single Resolution Mechanism
through parliament, proposed the backstop as one of a raft of
draft amendments to the bill. Loans would later be repaid by the
fund, according to the text of the amendment on the EU’s
website.
The bank-failure plan is part of a euro-area effort to
break the financial links between sovereigns and banks by
centralizing oversight and crisis management of failing lenders.
The blueprint, presented in July by Michel Barnier, the EU’s
financial-services chief, has met with a barrage of complaints
from governments.
Barnier’s proposal includes a central fund equivalent to 1
percent of government-insured deposits held by euro-area banks.
The commission has estimated the size of the fund, to be
financed by levies on banks, at 55 billion euros ($74 billion).
Ferreira, a socialist, has said the “public loan
facility” is needed to protect the SRM’s “credibility” during
the 10 years it will take to fill the common fund. Her proposal,
or variations on it, has won support from center-right lawmakers
such as Jean-Paul Gauzes and Pablo Zalba Bidegain, as well as
Sylvie Goulard, a liberal.
Anti-European Parties
“Especially as long as the Single Resolution Fund is not
entirely funded, it is essential to establish a European public
loan facility,” Gauzes said in one of his proposed amendments.
Any loan from the facility should be reimbursed from the bank-financed fund “within an agreed timeframe.”
Other requests include a bid by Auke Zijlstra, an EU
lawmaker from the anti-euro Dutch Freedom Party, to have
Barnier’s entire plan scrapped on grounds of illegality.
“The proposal infringes upon national budgetary
sovereignty, therefore it would require a treaty change in order
for it to be legally submitted,” according to one of Zijlstra’s
amendments.
Geert Wilders, the Dutch Freedom Party leader, is at the
nexus of a number of anti-Europe, anti-immigrant parties that
polls indicate are poised to do well in EU parliament elections
in May next year.
“The European Parliament could be composed in large part
of anti-Europeans next May,” French President Francois Hollande
said in an interview published in the Belgian newspaper Le Soir
last month.
‘Risk of Paralysis’
“This would be a step back and would create the risk of
paralysis.”
The idea of scrapping Barnier’s entire plan is also backed
by Bastiaan Belder, a Dutch lawmaker for the Reform Protestants
party, or SGP. Belder is head of the central committee of the EU
Parliament’s Europe of Freedom and Democracy Group, which also
includes the U.K. Independence Party.
Parliament prepares its negotiating positions on draft laws
by nominating a lead member for each file, who suggests draft
changes to the commission’s proposal. Other committee members
can put forward their own draft amendments, after which the
parliament’s political groups seek to negotiate compromises
before putting the matter to a vote.
