Press Release: Total cross-party unity against bad deal on bank resolution

Members of the European Parliament (MEPs) across the political spectrum refused on 04 February 2014 to back a bad deal on the arrangements for winding up ailing banks. They said the member states' position undermined the core aim of ensuring that taxpayers were not first in line to pay when banks ran into trouble. MEPs' chief target was the EU countries' proposals for setting up the bank-financed fund and for its decision-making methods.

EU Ministers in the Council of the European Union had reached agreement in December 2013 on a new authority to deal with bank resolution cases, together with a common fund to cover the costs.

However, in a bid to pacify German concerns that a mutualised fund, which would be built up to €55bn over ten years, could lead to German taxpayers underwriting the bulk of the costs, EU ministers had agreed that the governance and use of the fund should be subject to an intergovernmental treaty.

MEPs reject such plans for a third intergovernmental treaty in less than three years. The Commissioner for financial services, Michel Barnier said that for political reasons it seemed that intergovernmental arrangements would be needed for some aspects of the bank-financed fund but they should remain extremely limited.

• Primary Source

ESO: Background information: Council agrees general approach on Single Resolution Mechanism http://www.europeansources.info/record/press-release-council-agrees-general-approach-on-single-resolution-mechanism/

ESO: Background information: MEPs issue threat over bank resolution plan http://www.europeansources.info/record/meps-issue-threat-over-bank-resolution-plan/

European Commission: RAPID: Speech, SPEECH/14/91: Intervention lors du débat sur le Mécanisme de Résolution Unique http://europa.eu/rapid/press-release_SPEECH-14-91_fr.pdf

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