Finland's Katainen: EU without UK like "fish without chips"

BRUSSELS Wed Jan 16, 2013 7:33am EST

BRUSSELS Jan 16 (Reuters) - Existing banking problems in countries such as Ireland and Spain have to be kept separate from future bank crises, Finnish Prime Minister Jyrki Katainen said on Wednesday, reigniting a debate about the treatment of "legacy" bank assets.

In an interview, Katainen said he expected Britain to remain in the European Union, with "major British politicians and the people" convinced that Britain should be at the heart of Europe.

"The European Union without Britain is pretty much the same as fish without chips. It's not a meal anymore," he said.

Katainen also emphasised the need for a strong and comprehensive system for resolving bad banks in Europe, saying the mentality of leaders had to shift from bailing out banks to ensuring that investors and owners of banks were 'bailed in'.

Only then would taxpayers be protectd from having to carry the cost of bailouts, and the link could be broken between the debts of problem banks and the debts of sovereign countries.