* Says can still establish legal basis early next year
* Wants separation of ECB monetary policy, supervision roles
(Adds detail, background)
By John O'Donnell
BRUSSELS, Dec 5 European officials can no longer
meet their pledge to complete the legal framework for an EU-wide
banking union by the end of the year, European Central Bank
policymaker Joerg Asmussen said on Wednesday.
Asmussen's frank assessment of the state of play in Europe's
efforts to forge a banking union came a day after Germany and
France clashed publicly over plans to put the ECB in charge of
Germany's Wolfgang Schaeuble told a meeting of finance
ministers on Tuesday he could not support a plan that would give
the ECB's Governing Council the final say on supervision.
France's Pierre Moscovici and the ECB protested against any
watering down of a plan central to Europe's response to a
five-year banking crisis and which promises to unify the way it
deals with problem banks, ending a previously haphazard
"The Ecofin could have gone better," Asmussen said of the
clash between the French and Germans at a meeting of European
finance officials a day earlier.
"I think that we can establish the legal basis relatively
quickly, but we slip automatically into next year," he added.
Ministers will resume discussions on Dec. 12, a day before
EU leaders meet for their final summit of the year.
But Asmussen said it would not be possible to finalise the
framework this year even if the ministers agree on Dec. 12,
because of the need to involve the European Parliament.
EU leaders hope that by setting up a single, powerful
banking authority and later establishing a resolution fund for
distressed banks, they will cut the link between indebted
countries and their banking systems.
Most countries support the idea of supervision, the first
pillar of a banking union, but disagree on how best to structure
it, how far to go in unifying banking systems to share risks and
how to accommodate both euro and non-euro countries.
Some ECB policymakers, led by Bundesbank chief Jens
Weidmann, are worried the supervisory role could destabilise the
ECB by conflicting with its monetary policy role. They want to
nail down strict rules to separate these tasks.
Without this separation of responsibilities, the ECB could,
for example, allow information from its supervisory work
influence its interest-rate setting policy, which should be
focused on delivering stable prices.
"I believe that we must clearly separate monetary policy
tasks from supervisory tasks," Asmussen said. "One has to have a
sensible separation, of personnel and organisationally."
(Reporting by John O'Donnell; Writing by Paul Carrel; Editing
by Michael Roddy)