BELGIUM: ECB's Draghi welcomes, EP's Schulz criticises deal to cope with bad banks

Record ID: 564816

  • Title: BELGIUM: ECB's Draghi welcomes, EP's Schulz criticises deal to cope with bad banks
  • Date: 19th December 2013
  • Summary: BRUSSELS, BELGIUM (DECEMBER 19, 2013) (REUTERS) SATELLITE VANS OUTSIDE EU COUNCIL LIT UP ROOMS IN BUILDING
  • Embargoed: 3rd January 2014 12:00
  • Keywords:
  • Location: Belgium
  • Country: Belgium
  • Topics: International Relations,Economy,Politics
  • Reuters ID: LVA3X02J0EU1OIKMTQWJIAG8W0UK
  • Story Text: European Central Bank President Mario Draghi welcomes a deal on how to close failing banks while European Parliament President Martin Schulz questions details and criticizes the complexity of its structure.

    The European Central Bank welcomed on Thursday (December 19) a deal reached the night before among EU finance ministers on how to close failing banks in the euro zone.
    "The European Central Bank strongly welcomes the agreement that has been reached. It's an important step towards the completion of our banking union and not it is very important the trialogue with the Parliament be started immediately," European Central Bank (ECB) President Mario Draghi told Reuters as he arrived for the EU leaders summit.
    The ECB's backing is crucial as it takes over responsibility for supervising Europe's big banks from next year.
    But Martin Schulz, the German president of the European Parliament, which under EU rules must approve the agreement for it to take effect, was scathing in his assessment, vowing to reject the deal in its current form.
    "The 55 billion euros are going to take some time to accumulate, so this intermediate solution that has been opted for is too vague for the Parliament's taste. We feel we need to have a common solution now, we think we can achieve this, particularly using the European Stability Mechanism, we think that more use should be made of that than is suggested in the decisions taken by the finance ministers," he told a news conference.
    Schulz also questioned the deal details and criticized the complexity of the structure.
    "I also said to the heads of state and government that I read in the Financial Times, if you have the intergovernmental structure, if over a weekend there is a problem with a bank, so if banks need to be rescued, or subject to a resolution, according to the Ecofin's council 124 people would have to be involved in coming to a decision, that is what the Financial Times said. And if you are in the emergency department of a hospital and someone has to consult the board of directors before you are treated, rather than being treated immediately, well that is not going to do your health much good. So, I think that the Council together with the European Parliament need to discuss this," he said.
    The deal, clinched by European finance ministers in the early morning hours of Thursday after months of difficult negotiations, sets out a blueprint for shuttering troubled lenders, which pushed countries like Ireland and Cyprus to the brink of bankruptcy.
    But it falls short of what some nations, including France, Spain and Italy, had sought, by ruling out direct use of funds from Europe's rescue mechanism (ESM) in the near-term, and setting up what could turn out to be a cumbersome decision-making process for winding down banks.
  • Copyright Holder: REUTERS
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