Europe seals deals on banking and budget
Source: Agencies |
June 28, 2013, Friday
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EUROPEAN officials struck two significant deals on banking resolution and their long-term budget in last-ditch negotiations early yesterday, giving EU leaders a much needed lift before a summit on youth unemployment and growth.
After seven hours of talks that followed 18 hours of unsuccessful bargaining last week, European Union finance ministers finally agreed how to share the costs of future bank failures among investors and wealthy savers.
Designed to shield European taxpayers from having to foot the bill for rescuing troubled banks, the deal will be implemented on a national basis from 2018, concluding more than a year of complex, divisive discussions.
It also lays the ground for a single system to resolve failed banks in the eurozone and the 27-nation EU, the second stage of what policymakers call a European banking union, meant to strengthen supervision and stability of the financial sector.
The European Commission, the EU's executive, will put forward proposals for a single resolution mechanism next week, although any deal on it is a long way off.
The second breakthrough, after more than seven months of negotiations, was on a long-term budget for the European Union from 2014 to 2020, involving nearly 1 trillion euros (US$1.3 trillion) of spending on everything from agriculture to research, roads, bridges and development aid.
Irish Prime Minister Enda Kenny, whose country holds the EU's rotating presidency until the end of the month, helped broker the budget deal along with the presidents of the European Commission and the European Parliament.
The parliament, which has gained greater influence over EU legislation in recent years, had held up approval to demand more flexibility in how the money is spent and the right to redirect unspent funds instead of returning surpluses to member states.
In the end, a compromise was struck to the relief of EU officials, not least because tied up in the plan is 6 billion euros EU leaders have earmarked for spending on programs to fight youth unemployment - the focus of the summit.
"This is an important day for 500 million citizens," said Kenny. "It is also an important day for the 26 million who are unemployed in this union."
With two major obstacles out of the way, EU leaders face a far less awkward series of discussions during the two-day summit through today, with a session dedicated to unemployment, perhaps the worst legacy of the crisis that has bedevilled the EU since 2010.
After seven hours of talks that followed 18 hours of unsuccessful bargaining last week, European Union finance ministers finally agreed how to share the costs of future bank failures among investors and wealthy savers.
Designed to shield European taxpayers from having to foot the bill for rescuing troubled banks, the deal will be implemented on a national basis from 2018, concluding more than a year of complex, divisive discussions.
It also lays the ground for a single system to resolve failed banks in the eurozone and the 27-nation EU, the second stage of what policymakers call a European banking union, meant to strengthen supervision and stability of the financial sector.
The European Commission, the EU's executive, will put forward proposals for a single resolution mechanism next week, although any deal on it is a long way off.
The second breakthrough, after more than seven months of negotiations, was on a long-term budget for the European Union from 2014 to 2020, involving nearly 1 trillion euros (US$1.3 trillion) of spending on everything from agriculture to research, roads, bridges and development aid.
Irish Prime Minister Enda Kenny, whose country holds the EU's rotating presidency until the end of the month, helped broker the budget deal along with the presidents of the European Commission and the European Parliament.
The parliament, which has gained greater influence over EU legislation in recent years, had held up approval to demand more flexibility in how the money is spent and the right to redirect unspent funds instead of returning surpluses to member states.
In the end, a compromise was struck to the relief of EU officials, not least because tied up in the plan is 6 billion euros EU leaders have earmarked for spending on programs to fight youth unemployment - the focus of the summit.
"This is an important day for 500 million citizens," said Kenny. "It is also an important day for the 26 million who are unemployed in this union."
With two major obstacles out of the way, EU leaders face a far less awkward series of discussions during the two-day summit through today, with a session dedicated to unemployment, perhaps the worst legacy of the crisis that has bedevilled the EU since 2010.
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