All 27 EU countries should submit their big banks to a single cross-border supervisor as part of a banking union to be enacted as soon as next year, the president of the European Commission has urged.
The plan, which would also include an EU-wide deposit guarantee scheme and a rescue fund paid for by levies on financial institutions, could be achieved by next year and without changes in the bloc’s existing treaties, Mr Barroso said.
However, George Osborne, the UK chancellor, insists Britain will not be part of any banking union that makes its taxpayers liable for recapitalising eurozone banks or puts major British banks under the watch of an EU supervisor.
Mr Barroso said he believed there is now greater appreciation in both London and Berlin about the need for an EU-wide banking regime, arguing there was significant political impetus for such changes.
Mr Barroso said Britain should be allowed to opt out of such plans – as long as it did not block their progress. While he acknowledged this could further isolate Britain within the EU and it was not his preferred choice, Mr Barroso said it was imperative to ensure Britain stayed in the EU. “It’s of course the British right to decide if they want or not to join further steps of integration”, Mr Barroso said. “If other countries that are not in the euro area want to join us, I think Britain is going to accept this.”
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