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German doubts over new system
Source: Agencies |
September 4, 2012, Tuesday
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Print Edition
Print Edition
GERMANY'S finance minister hit hopes that Europe's stressed banks could soon tap the region's rescue funds directly when he said yesterday that a new Europe-wide banking supervisor may not be up and running in the new year.
Meanwhile, Chancellor Angela Merkel called on Germans to show "solidarity" with those members of the 17-country bloc that uses the euro which are struggling with much-needed economic reforms.
European Union leaders agreed in June that funds set up to bail out indebted governments could be allowed to funnel money directly to ailing banks - rather than via governments which would add to their debt burden - once an effective central bank supervision system is established.
The idea is to assuage worries about the health of Europe's banking system, which is in danger of grinding to a halt as banks become wary of lending to one another.
The European Commission will make proposals for a new supervisory system on September 12. Internal market commissioner Michel Barnier said last week he hopes it could be phased in starting next January and be extended to all banks in the eurozone at the beginning of 2014.
Barnier also voiced hopes that banks could be helped directly from the 500 billion-euro (US$629 billion) European Stability Mechanism, Europe's planned permanent bailout fund, starting next January.
But German Finance Minister Wolfgang Schaeuble was skeptical if the new system would start work next year.
"I think that's pretty unrealistic," he said on Deutschlandfunk radio.
"I have my doubts that it will come so quickly, and so I think that once again expectations are being created here that can't be fulfilled, not even close," Schaeuble said. "That is always a reason for trouble and nervousness in the financial markets."
Berlin and Brussels already appear at odds on the extent of the new supervisor's powers.
Barnier has argued that all banks need to be supervised centrally by the European Central Bank; Germany argues that the supervisor should limit its focus to major banks whose stability is vital to Europe.
Meanwhile, Chancellor Angela Merkel called on Germans to show "solidarity" with those members of the 17-country bloc that uses the euro which are struggling with much-needed economic reforms.
European Union leaders agreed in June that funds set up to bail out indebted governments could be allowed to funnel money directly to ailing banks - rather than via governments which would add to their debt burden - once an effective central bank supervision system is established.
The idea is to assuage worries about the health of Europe's banking system, which is in danger of grinding to a halt as banks become wary of lending to one another.
The European Commission will make proposals for a new supervisory system on September 12. Internal market commissioner Michel Barnier said last week he hopes it could be phased in starting next January and be extended to all banks in the eurozone at the beginning of 2014.
Barnier also voiced hopes that banks could be helped directly from the 500 billion-euro (US$629 billion) European Stability Mechanism, Europe's planned permanent bailout fund, starting next January.
But German Finance Minister Wolfgang Schaeuble was skeptical if the new system would start work next year.
"I think that's pretty unrealistic," he said on Deutschlandfunk radio.
"I have my doubts that it will come so quickly, and so I think that once again expectations are being created here that can't be fulfilled, not even close," Schaeuble said. "That is always a reason for trouble and nervousness in the financial markets."
Berlin and Brussels already appear at odds on the extent of the new supervisor's powers.
Barnier has argued that all banks need to be supervised centrally by the European Central Bank; Germany argues that the supervisor should limit its focus to major banks whose stability is vital to Europe.
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