Germany's approach towards completing a eurozone Banking Union has won the backing of Austrian Finance Minister Maria Fekter, who said she would like to change EU law eventually.
So far, Berlin had insisted the 28-nation bloc needs to amend its Treaty if it is to move the power to unwind or fix struggling banks from a national to a European level. But EU officials said at the weekend that Germany was working on a plan that would move things forward without changing existing EU law, potentially removing a major hurdle to finish the ambitious project.
German Finance Minister Wolfgang Schäuble has sought a two-step approach to the Single Resolution Mechanism (SRM). The first would coordinate action among national resolution agencies and funds but without a pan-European agency. The second would require Treaty change to set up such an agency, he said.
"I am very close to Wolfgang Schäuble and the German position that we have to try to have an agency that is anchored in the treaties so that we don't get into an Inquisition mode", Fekter told a financial conference. There also needed to be clarity on separating the European Central Bank's monetary and bank supervisory roles, she added.
"The only thing to lead us out of this dilemma is clear official regulation with a treaty change. (That is) not possible at the moment, so that is why we are using this temporary construction or else we would lose too much time."
At the same conference, ECB policymaker Ewald Nowotny also stressed the need for political and economic integration to go hand in hand. "I cannot see Banking Union completely independently from the readiness to go into the next political areas. In other words, if you are not ready to go into these areas then it would be dangerous to take the second step before the first."
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OpenEurope blogpost analysing this policy shift
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