07 February 2014

Council report on consideration of EP's position on SRM Regulation

The Presidency of the Council of the EU has published a report addressed to the Council and to Coreper. It contains consideration of the EP's amendments in preparation for political agreement in relation to the SRM Regulation. (Includes excerpts from debate.)

The document highlights the EP’s continued disagreement with:

• the principle that certain constitutive parts of the initial proposal of the Commission are being dealt with within the intergovernmental agreement (IGA) and not in the Regulation;

• and  the issue of whether the Council may overrule the decision of the proposed Single Resolution Board at the stage of adopting a resolution decision as proposed in Article 16 of the SRM Regulation.

As a result, the Presidency states that Coreper could request the Council for an updated mandate to conclude negotiations with the Parliament.

Council Report

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Debate

ECON Chair Sharon Bowles

• stated that some finance ministers had originally said that the Parliament would simply have to give in on the SRM. That is not how it works. The tone had since improved somewhat;
• called for streamlined procedures so that rapid country-blind approaches are taken, without any hamstringing by too much Council or nationally-tilted decision-making;
• called for country-blind use of the funds;
• noted that banks are affected by the economies they serve - so it is true that there is a Member State link which will endure even after the asset quality review deals with legacy issues. There are two possible responses for this:
  • create a fund that right from the start helps to break those links, fostering collective financial stability and growth; or
  • put controls and compartments on the fund that unpicks those benefits.
• stated that the latter approach - the Council's - would put brakes on achieving a better monetary union; and
• questioned the need for haste, since the Council's approach is the opposite of haste. The Parliament would negotiate in good faith and speedily in order to secure an agreement that would get the best of both solutions - but not at any price. There is no deadline. If necessary, the work can be left unfinished to be continued by the next Parliament. 

Commissioner Barnier

• called for a swift agreement without any waste of time. He noted the Parliament's readiness to proceed quickly;
• reiterated the Commission's belief that Article 114 is the right legal base, but that the resort to an IGA is not contrary to the Treaty so long as it is limited to the transfer and mutualisation of funds;
• stated that one could reflect on an acceleration of the mutualisation of the national compartments and even on the ideal of a common fund from day one. One could also consider the option of introducing a time-limit for the IGA;
• called for progress on the question of "backstops", even if they are not mutualised immediately but only gradually;
• stressed the need for a rapid and effective decision-making capacity;
• called for the mechanism to be made more democratically legitimate along the lines adopted for the supervision mechanism;
• emphasised the need to preserve the coherence of the Single Market, which is important for all 28 Member States; and
• called for a new mandate from the ECOFIN Council. 

Information note, 11.2.14

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