25 July 2013

Reuters/Welt: Germany may file complaint against EU banks plan

The German government is considering whether to file a complaint at a European court against the European Commission's proposals on bank resolution, which it thinks might be unlawful and would require a treaty change.

Partly translated from the German

Reuters and the German newspaper Die Welt quoted a source, saying that "a decision on whether to file a complaint will be made at the start of 2014 and will depend on the outcome of negotiations".

Germany's Finance Minister Wolfgang Schäuble wants to prevent the EU plans for Banking Union by any means possible, because the Commission envisages that the resolution of ailing banks would have to be financed by a common European resolution fund, into which Germany would have to pay the highest percentage. Berlin, however, favours a system of a network of national funds.

But, as the federal government has no veto in this matter and a so-called qualified majority of EU countries is enough to push through the project, Germany needs to organise opposition to the proposal and team up with at least another large and several small countries at his side. The French, however, Germany’s natural ally in Europe, are in favour of Barnier’s proposal.

Die Welt reports that in senior government circles, Great Britain is assumed to be on Germany’s side. Moreover, this unusual alliance was apparently supported by the Finns and the Estonians, and maybe some others as well. This, however, was no guarantee that Schäuble would succeed in slowing down the EU plan and he had therefore started considering taking legal action against the Commission’s plan.

It was reported further that sources involved in the negotiations had said that if in doubt, Schäuble might use a "trick" and intends to drag out the process deliberately, thus prolonging the debate about the proposals until a new Commission is elected in late 2014.

A spokesman for the German Finance Ministry said the ministry did not plan to draw out consultations and denied these allegations, reported Reuters. "We want a single resolution mechanism quickly but it must have a sound legal foundation", the spokesman added. "Only once the negotiations have been concluded will we be to see whether other steps may be necessary."

Schäuble has previously said the proposal is out of step with EU law and has long argued a change to the EU Treaty would be needed for a resolution agency to get executive clout.