Germany says banking union won't happen by start of 2013
WARSAW (Reuters) - Joint supervision of the euro zone's banks, a key part of the bloc's crisis fighting plan, will not be in place by the start of next year as originally planned, a German official said on Monday.
Euro zone leaders have agreed in principle on the creation of a banking union in response to the debt crisis afflicting many of the bloc's banks and governments, but there is disagreement among EU states about what the union should involve and how fast it should be put in place.
Europe ministers from France, Germany and Poland, meeting in the Polish capital, issued a statement saying there were determined to act swiftly to implement the joint supervision.
But asked by reporters at a news conference to be more specific about the timetable, it became clear that some issues were still to be resolved.
"I can state with full certainty that this (establishment of joint supervision) will not happen in January 2013 because there are too many technical issues, too many expert issues that need to be clarified," said Michael Link, Germany's Europe Minister.
"We want to act fast but precision is a priority," Link said, speaking through an interpreter.
His French counterpart, Bernard Cazeneuve, at the same news conference, said Paris was encouraging the European Commission to have the banking union in place by the end of next year.
"We are encouraging the European Commission to create the supervision by end-2013. The supervision should be created as soon as possible because it is the basis element to allow the functioning of the ESM, that is, a direct recapitalization instrument for banks," Cazeneuve said.
In their joint statement issued earlier, the Europe ministers said they were "determined to work swiftly to establish an effective single supervisory mechanism involving the ECB (European Central Bank) within the framework agreed at the June summit."
The statement said a meeting of EU leaders in October should identify work that needed to be done to clear the way for the banking union, including steps to promote jobs and growth. It said a roadmap to implement these steps should be agreed in December.
The ministers also said they were determined to find agreement on the European Union's next long-term budget at a meeting of European leaders to take place in November.
"We feel an urgent need for the future financial framework to focus even more on policies that contribute to growth, employment and competitiveness," the statement said.
Poland is a major recipient of EU development cash and is anxious for the money to continue flowing in the next 7-year funding round, despite an economic slowdown that has made net donor nations less inclined to pay up.
(Reporting by Marcin Goettig; Writing by Christian Lowe; Editing by Toby Chopra)
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