Note
19/10/2012
P11984 FEB171067
Isabelle Marchand
Final
The outcome of the 18/19 October European Council on a
road towards a banking union
The European Council focused on the future of the Economic and Monetary Union, the interim report
of Van Rompuy serving as a basis for discussion. The main priority was progress on the banking
union. European Union leaders have agreed plans to complete the European banking union by
January 2014, after the general elections in Germany. The concession was made to Angela
Merkel who argued for "quality" over "speed" in putting in place the new supervisory system.
In this context, the European Council invites the legislators to proceed with work on the legislative
proposals on the Single Supervisory Mechanism (SSM) as a matter of priority, with the objective of
agreeing on the legislative framework by 1 January 2013. "Once this is agreed, the single
supervisory mechanism could probably be effectively operational in the course of 2013," said
European Council President Herman Van Rompuy.
And this will pave the way for the direct recapitalisation of banks. However, no decision has been
taken by the Heads of State and Governments on this issue, it has been referred to the Eurogroup to
draw up the exact operational criteria that will guide direct bank recapitalisations by the ESM.
Merkel insisted - and obtained - that no recapitalization would take place until the system is fully in
place, probably after the September 2013 general elections in Germany.
The European Council also noted the Commission's intention to propose a single resolution
mechanism for Member States participating in the SSM once the proposals for a Recovery and
Resolution Directive and for a Deposit Guarantee Scheme Directive have been adopted. Therefore,
the European Council called for the rapid adoption of the legislative proposals on bank recovery
and resolution and on national deposit guarantee schemes, as well as for the rapid conclusion
of the single rule book, including agreement on the proposals on bank capital requirements
(CRR/CRD IV) by the end of the year.
This very dense and interesting discussion among Heads of State and Government on this project,
will allow Herman Van Rompuy to set out a clear roadmap at the December European Council.
In addition to this process towards a banking union, the European Commission wants to put efforts to
revive growth and jobs. Therefore the Single Market should be completed, some progress was
already there, but frankly not enough. The Commission will boost this progress and stated that next
week it will take the first step towards launching enhanced cooperation on a financial transactions
tax. The Commission will also present an action plan on tax fraud and tax evasion before the end of
the year.
The final European Council conclusions can be found by this link:
http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/en/ec/133004.pdf
The EBF press statement can be found by this link: http://www.ebf-fbe.eu/uploads/D1954A2012%20Statement%20Council%20on%20SSM%2019%20Oct.pdf
Belgian Financial Sector Federation
Rue d'Arlon 82 - 1040 Brussels | http://www.febelfin.be
T + 32 2 507 68 11 | F + 32 2 888 68 11
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