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EU summit: Compromise deal on eurozone bank supervisor

EU leaders have agreed to set up a single eurozone banking supervisor – a major step towards a banking union, BBC reports. A legislative framework is to be in place by 1 January next year, with the body starting work later in 2013.The European Central Bank-led mechanism will have the power to intervene in any bank within the eurozone. The deal appears to be a compromise between France and Germany, who earlier disagreed over the timing and over the number of banks the ECB would oversee. France and the EU Commission wanted joint banking supervision, with the ECB in the lead role, to become operational in January 2013. But German Chancellor Angela Merkel stressed that national budget discipline should be the priority. Germany had been at odds with the European Commission over the scope of the proposed ECB supervision. Under the draft plan, all 6,000 banks in the 17-nation eurozone would be included – Germany wanted it limited to the biggest, “systemic” banks.

President Basescu: ‘We succeeded to become part of the banking Union

President  Basescu Traian said on Friday, after the European Council, that the Romanian side succeeded in its plan of acceding to the banking Union, according to the conclusions of European leaders, adding that it has been decided that the euro zone will have its own budget. “What we planned, i.e. having access to the Banking Union, happened through today’s conclusions. Our effort is well represented in the conclusions that remained definitive. After all, inside the Banking Union the problem is related to the monitoring of all banks of the euro zone, but also of non-euro states that choose to be part of this system, the Single Supervisory Mechanism, to be more precise,” Basescu said. He added that the mechanism gives rights and obligations, also in the negotiations that will take place until the European Council scheduled for December. Our central bank and ministry of finance representatives will have to support our point of view in the regulations that are being built and will be adopted by December 31, 2012. So the rules and regulations for the functioning of the Mechanism will be completed and adopted by 31 December 2012 or by January 1, 2013. Different terms have been used; it is certain that, the process of implementing these regulations begins on January 1, 2013 and they will spare no bank, neither large, nor small banks,” the president mentioned.He added that during the European Council it has been decided to establish a budget of the euro zone, but stressed that it will not affect the EU budget. Basescu also said that the financing sources of the euro zone budget might be represented by the tax on financial transactions.

 

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