Europe is on the brink of a banking union deal that will bring a “real revolution” to its financial system, France’s finance minister predicted, as he signalled differences with Germany on a system to fund failed banks were narrowing, reports The Financial Times.
Pierre Moscovici said it was essential any deal included a single, central rescue fund for dealing with failed banks, something that Berlin has resisted, favouring a network of national funds instead.
But Mr Moscovici indicated a compromise that would combine both German and broader EU demands was in the works following a meeting in Berlin last Friday of key countries and EU officials convened by Wolfgang Schäuble, German finance minister.
“We have to build compromises,” Mr Moscovici told the Financial Times ahead of a meeting of finance ministers in Brussels. “There has to be both a single resolution fund and a role given to national input. That is not a contradiction. It is an articulation between them that we are seeking.”
The details of how this hybrid scheme – essentially a network of national funds under a single EU umbrella – will operate is likely to be one of the most contentious elements of a final deal. In any event, such a fund will take 10 years or more to reach its target level of about €55bn.
Germany has dropped objections to the European Commission, the EU’s executive arm, becoming the main authority for winding up failed banks – as long as no public money or significant resolution funding is required.
Read more of this report from The Financial Times.