Lithuania's central bank chief said that national interests will have to be overcome if the European Union is to secure the next step of banking union by the end of 2013.
Despite a compressed timetable, reservations in Germany and a looming changing of the guard in Brussels, progress can be made, Central Bank of Lithuania Governor Vitas Vasiliauskas said. "Overcoming national interests would be the main issue (for achieving completion by end 2013)", Vasiliauskas said. "There is a political agreement on the principles of banking union. "I hope that all parties will keep to these principles."
Vasiliauskas said banking union was "about 50 per cent" completed, with legislation pending to enable the European Central Bank to take over bank supervision and political agreement on common rules on how each country should share losses amongst creditors of its failing banks.
Proposals on a single resolution authority that would handle bank wind-downs at a pan-European level, rather than nationally, were made by the European Commission last month and will now go forward to ministers. Agreement on sharing losses between creditors, sealed in principle between eurozone countries after late night talks in the dying days of the Irish EU presidency in June, is now the subject of technical negotiations involving Vasiliauskas' officials. It then goes before the European Parliament.
He rejected concerns that a country the size of Lithuania could buckle under the weight of having to achieve so much in such a short period of time. The central bank will support the finance ministry with between 20 and 25 of its experts. "Lithuania is not the first such small country which takes the presidency", said Vasiliauskas. "The size of the country is not only what matters."
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