According to the Eurogroup President, “a quite some progress” have been made between the Council and the Parliament. The main issue still the timing for the single resolution fund to be active – Member States say ten years, MEPs and ECB President Draghi say five.
All Member States were “determined to reach an agreement by the end of March” on the Single Resolution Mechanism and there have been “a quite some progress despite the complexity of the issues.” These were the remarks made by Eurogroup President Jeroen Dijsselbloem at the Ecofin press conference after a special ministerial meeting held in Brussels to discuss on the SRM. The target is “to reach an agreement by the end of March,” before “the end of the current Parliamentary term” on a mechanism aimed at coordinated and controlled bank bailouts, without affecting Member States’ economies.
There is “not just a practical reason, there is also a reason of economic urgency,” said Dijsselbloem, “we need to put the banks right, we need to give clarity on the banking union so the financial markets in Europe can function again and support the economic growth,” he added. The Eurogroup President discussed about five outstanding issues still to be addressed: “the financing of resolution costs,” the possibility of “lending between national compartments and the related decision-making,” how to manage the entrance in later stage of other countries, their possible contribution, the time given. Then, “the reference to rules on the bail-in tool” and finally “the burden sharing within banking groups in case of cross-border resolution” for banking groups in cross-border situations.
Yet, the main issue concerns the pace of mutualisation of national contributions to the SRF. There were divergent views on how to achieve this, with some ministers to increase the pace of it, and some others calling linking it with bringing forward the date for completion of the fund. Germany urged for a time-span of ten years in which each state will manage its own fund before the start of the SRM. The idea has been repeatedly criticized by several sources, even by ECB President Mario Draghi. In fact, during a recent event in Brussels, he defined the 10-year period as “unduly long”, adding that “We would see merits in doubling the pace of mutualisation to have a genuine European fund within five years” – the only difference would be to have a SRM in five years, given that the target would be met in ten years in any case.
According to Michael Barnier, one of the possibilities to consider is “to target a 5-year time, with the start of the mutualisation and fund pooled over seven years.” Even for Barnier, it would be “possible to reach an agreement in two months” but “a compromise” is needed on another issue – the decision on the SRM has been taken through an Intergovernmental Agreement, excluding MEPs from the decision-making. “Were the Parliament to approve the Intergovernmental Agreement on the SRM, we would have to make concessions on other issues.”
Alfonso Bianchi
