EU finance ministers, MEPs look to strike bank union deal

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EU finance ministers, MEPs look to strike bank union deal

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Who should decide when to shut a failing bank in Europe?

And, more importantly, who should pick up the tab and how?

Those are the big questions that EU governments want to answer this week.

Finance ministers and MEPs are negotiating on what a single European agency to shut ailing lenders would look like, how much money is disbursed and when to back it up.

“The Parliament has to realise that for the member states it’s very important to have some elements in an intergovernmental agreement for example including the start-up and the filling of the fund and the use of the funds,” said Dutch Finance Minister Jeroen Djsselbloem, the current chairman of the Eurogroup.

If a deal can be struck, it would be the final step towards creating a so-called banking union aimed at stabilising the single currency.

If no agreement is found, officials may have to wait until after May’s European elections, delaying the legislation for seven months.

France’s Finance Minister Pierre Moscovici said he was not against minor revisions to the proposal, but warned time is running out.

“I am not in favour of undoing or re-doing the agreement we finance ministers made on the 18th of December,” Moscovici told reporters. “But I am in favour of improving it, given that the EUropean Parliament has raised a number of questions that in my view could increase the effectiveness of the mechanism.”

For example, MEPs want the ECB to be only body to declare that a bank is failing. EU governments say that national authorities should have a say.