Germany, France clash over ECB plans
Source: Agencies |
December 5, 2012, Wednesday
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Print Edition
Print Edition
GERMANY and France clashed publicly yesterday over plans to put the European Central Bank in charge of supervising banks, deepening a dispute over the scope of ECB powers that threatens to derail one of Europe's boldest reforms.
With time running out to meet a pledge to complete the legal framework for an European Union-wide banking union by the end of the year, Germany's Wolfgang Schaeuble told a meeting of EU finance ministers he could not support a plan that would give the ECB the final say on supervision.
France's Pierre Moscovici and the ECB protested against any watering down of a plan central to Europe's response to a five-year banking crisis and which promises to unify the way it deals with problem lenders, ending a previously haphazard approach.
"The right of the last decision cannot be left to the ECB Governing Council," Schaeuble told the Brussels meeting, adding that there could be no deal unless national supervisors had responsibility for most banks.
"A Chinese wall between banking supervision and monetary policy is an absolute necessity," he said, also voicing skepticism that an independent central bank should even take on the tasks of supervision.
Moscovici countered that EU leaders, who had given finance ministers responsibility for drawing up a supervisory framework, had placed the ECB at the center of their vision.
"We have no mandate for a dual system of supervision, which would call into question the existence of a single system for some banks," he said, conceding later that their differences were tough to hide.
The depth of divisions between the two biggest eurozone economies highlighted the difficulty in reaching a deal, making a deadline of this year uncomfortably tight.
Yesterday's occasionally heated talks ended in disagreement and the ministers will resume discussions on December 12.
Most countries support the idea of banking supervision, the first pillar of a banking union, but disagree on how best to structure it or how far to go in unifying banking systems to share risk and prevent discrimination between euro and non-euro countries.
With time running out to meet a pledge to complete the legal framework for an European Union-wide banking union by the end of the year, Germany's Wolfgang Schaeuble told a meeting of EU finance ministers he could not support a plan that would give the ECB the final say on supervision.
France's Pierre Moscovici and the ECB protested against any watering down of a plan central to Europe's response to a five-year banking crisis and which promises to unify the way it deals with problem lenders, ending a previously haphazard approach.
"The right of the last decision cannot be left to the ECB Governing Council," Schaeuble told the Brussels meeting, adding that there could be no deal unless national supervisors had responsibility for most banks.
"A Chinese wall between banking supervision and monetary policy is an absolute necessity," he said, also voicing skepticism that an independent central bank should even take on the tasks of supervision.
Moscovici countered that EU leaders, who had given finance ministers responsibility for drawing up a supervisory framework, had placed the ECB at the center of their vision.
"We have no mandate for a dual system of supervision, which would call into question the existence of a single system for some banks," he said, conceding later that their differences were tough to hide.
The depth of divisions between the two biggest eurozone economies highlighted the difficulty in reaching a deal, making a deadline of this year uncomfortably tight.
Yesterday's occasionally heated talks ended in disagreement and the ministers will resume discussions on December 12.
Most countries support the idea of banking supervision, the first pillar of a banking union, but disagree on how best to structure it or how far to go in unifying banking systems to share risk and prevent discrimination between euro and non-euro countries.
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