EU officials seek pre-election banking union deal

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EU officials seek pre-election banking union deal

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EU policymakers met in Brussels on Tuesday with a view to striking a deal on how to save ailing eurozone lenders from failure.

Finance ministers were holding the second day of discussions on planned legislation to set up a safety net for sick banks.

EU leaders initially backed a blueprint in December, but the legislation also requires the approval of MEPs, who disagree on a number of key elements.

Greek Finance Minister Yannis Stournaras told reporters in Brussels that “time is running out” as European elections loom on the horizon.

“We must get a new mandate because as you know the Parliament will vote (on the planned legislation) in the week starting on the 14th of April,” he said.

Parliamentarians will soon start campaigning for May’s EU elections, which kick off on May 22.

EU leaders must also decide on who joins the next European Commission, which is set to be appointed in November.

It means the legislation, which aims to create a banking union across the eurozone, could get left in limbo until the end of the year.

The idea is to create a central agency that could step in to help sick banks with a 55 billion euro fund financed from special taxes on the financial sector.

But governments and MEPs disagree on who should decide whether to close a bank and the timetable for such funds to be used.

It has already been agreed that the European Central Bank will be responsible for supervising the single currency area’s largest banks.

Meanwhile, Germany’s Finance Minister Wolfgang Schaeuble accused European Parliament President Martin Schulz of mis-using his functions.

Schulz is the European Socialist Party’s top choice to run the EU executive. But critics argue that he should stand down from his current role to avoid a conflict of interest.

“With the parliament I think we’ll find an understanding. The question is if, in times of an election campaign, we’ll be able to reach an agreement with a president of the parliament who misuses his function as president for that campaign,” said Schaeuble.