French President Francis Hollande said in the ongoing EU summit in Brussels that by creating a new banking union in Europe by 1st Jan. In the opinion of French leaders it will help achieve economic integration within Europe at faster rate.
Francis Hollande said, “Thanks to this we can advance more quickly and with more assurance,”
Hollande made the statement while speaking to leaders in the EU summit after it was agreed upon that Europe will have a single banking supervisor for the 17 member strong European Union.
Mr Hollande also pointed out that for different states, the speed of integration must also vary.
He said at the conference, “We should have a council of the eurozone to meet on a regular basis… We need different speeds – that’s agreed by everyone now, and there are even some moving backwards,”
German Chancellor Angela Merkel said that quality aspect should be given dominance while establishing the banking union and not its speed.
BBC’s Europe editor Gavin Hewitt said, “Compromising and fudging is the way business often gets done in Brussels”
On the other hand Portuguese journalist Sofia Palma Rodriquez said, “What the media do not do enough is study the reasons we are in this crisis”
Concerns on UK
The supervision of this new banking union is not going to take place for the UK that happens to be the centre of economic activity in Europe, but outside Euro.
BBC business editor Robert Peston had said on this development saying that UK will not be taken into consideration zone from the next time any major decision is going to make on economic and financial decisions regarding Europe’s future.
Angela Merkel said about the agreement, “banks must be supervised in a differentiated way. That means that some will be direct… at the ECB level and others indirectly, via the national authorities.”
Merkel also told BBC that ECB President Mario Draghi had told her that ECB will require a few months time before actually assuming its new responsibility.
Complications in establishing Banking Union
EU leaders have said that they are of the opinion that the monetary policy setting role of the ECB shall not be confused with its banking supervisory function.
Another issue of contention is that ECB will be provided with more control over banking machinery of these nations and strip off the national regulators of their position locally. This is said to create legal complications for instituting banking union.
Rumors of changes in treaty are also running high because of this complication which is not taken really well by EU member states.
EU commission has also made a point by saying that the arrangement will have adequate provisions for the non members to join later in case they want to join the banking union.
Source: BBC News
Photos: CNN, BBC, Alyunania