PARIS Dec 19 The French and German finance
ministers sought on Thursday to reassure that a European plan to
deal with failed banks would be sufficient, hours after a deal
was reached in Brussels.
After difficult negotiations, EU finance ministers drafted a
blueprint for winding down failed banks which stops short of a
more ambitious plan to tackle troubled lenders jointly at the
euro zone level.
Eager to keep its taxpayers from being left on the hook for
bank failures elsewhere in Europe, Germany has stood firm
against the use of euro zone money while France has sought a
robust joint backstop to contain a crisis.
Asked at a news conference in Paris if the backstop was
sufficient to assure savers and markets, German Finance Minister
Schaeuble said: "We have reached a result which is convincing."
Speaking at the same news conference after talks between the
two, French Finance Minister Pierre Moscovici said the deal
would yield a credible joint backstop after a long transition
"There is no reason to doubt from the start decisions that
are solid and politically extremely firm," he said.
Under the agreement, Europe will eventually have a joint
fund of about 55 billion euros ($75.69 billion) financed by
banks to cover the cost of winding down a collapsed lender.
Schaeuble dismissed a recent suggestion from the
International Monetary Fund that at least 100 billion euros
would be needed to handle a crisis with several medium sized
banks failing at the same time.