France and Germany are squabbling over who should foot the bill for Europe’s banking union, with Paris fearing its banks will pay the biggest share towards a €55bn rescue fund, reports The Financial Times.
As the EU enters a potentially decisive week in talks on a central system for handling bank crises, France is fighting plans to make its sector of big universal banks the leading contributors to the common insurance plan.
It is one of several highly political issues that remain unresolved with days left before a Wednesday deadline to agree legislation with the European parliament, so that it has time to pass before the European elections.
Although it is highly technical, the dispute over the bank levy cuts across some fraught EU issues: whether the rescue system is genuinely European or actually partly national; whose banking system is most risky; and therefore whose lenders should pay more for insurance. France, Spain and Portugal have all submitted papers on the topic.
One senior diplomat said the breakdown of contributions was an “eye opener”, given that Germany, the EU’s biggest economy, is leading resistance to increasing the heft of the rescue fund or accelerating its mutualisation.
“Everyone put up with [Germany’s] antics because they thought it was the German banks that pay by far the most, but that isn’t quite true. It is the French banks that will fund this party,” the official said.
Some MEPs think it right that complex, “too big to fail” banks pay more. Sven Giegold, a German Green in the parliament negotiating team, said he was “appalled” by member states’ attempting to rig the calculation, to “give a subsidy to risky banks”.
Read more of this report from The Financial Times.