BELGIUM: EU finmins agree to protect small depositors in bank closures, increase spending for 2013 budget

Record ID: 858158

  • Title: BELGIUM: EU finmins agree to protect small depositors in bank closures, increase spending for 2013 budget
  • Date: 14th May 2013
  • Summary: BRUSSELS, BELGIUM (MAY 14, 2013) (REUTERS) EU COUNCIL BUILDING EU FLAGS OUTSIDE EU COUNCIL
  • Embargoed: 29th May 2013 13:00
  • Keywords:
  • Location: Belgium
  • City:
  • Country: Belgium
  • Topics: International Relations,European Union
  • Reuters ID: LVAC5321XXSK7TB6426EMW3AXKJ9
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  • Story Text: Depositors keeping less than 100,000 euros in a bank that is being closed down will get all their money back, European Union finance ministers agreed on Tuesday (May 14), and most supported the idea that bigger depositors would get privileged status.

    "Almost everybody agrees that deposits under 100,000 euro should remained fully guaranteed. There was also considerable support that deposits over 100,000 euros should be included in bail-in, but should be subject to the depositor preference and only bailed-in at the very end of the creditor hierarchy," Irish Finance Minister Michael Noonan, who chaired the talks, told a news conference.
    The ministers were discussing rules of closing down banks and the hierarchy of losses imposed on the banks' owners and creditors in such an event.
    EU Internal Market Commissioner Michel Barnier said that most ministers supported the view that large depositors above 100,000 euros should enjoy a privileged status, and be the last to lose any funds, after senior bondholders.
    The ministers are to conclude the discussions in June.
    The 27-bloc finance ministers also approved a 7.3 billion euro increase in the bloc's spending for 2013, as part of a deal to unblock talks on the EU's next long-term budget.
    The cash will be used to cover unpaid bills for EU-funded infrastructure projects, and was a precondition for the European Parliament to begin talks with governments to finalise the 2014-2020 budget, worth nearly 1 trillion euros ($1.3 trillion).

    "Ministers also reached a very significant political decision to amend the EU budget for 2013. Ministers decided to move ahead in two stages. We've agreed today to provide an additional 7.3 billion in this first stage. This will be focused on measures to support economic growth and create jobs, specially for young people," Noonan said.
    It represents a rise of 5.5 percent on the original budget of 133 billion euros for this year, bringing overall spending to 140.3 billion euros.
    But that figure could increase by a further 4 billion euros, after governments agreed to address the European Commission's request for an overall rise of 11.2 billion euros in two stages, with a second increase scheduled after the EU summer break.
    On Monday, government and parliament negotiators held their first formal talks on 2014-2020 budget.
    The parliament is not expected to demand changes to the overall spending limit of 960 billion euros agreed by EU leaders in February.
    But lawmakers want more power to move unspent money from one budget line to another, and a legal review of the spending levels after EU elections in 2014 which could increase spending if Europe's economy improves.
    EU officials hope to reach a deal on the budget well before the end of this year to allow enough time to adapt EU funding programmes to the new rules before they enter force in 2014.($1 = 0.7705 euros)
  • Copyright Holder: REUTERS
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