BERLIN Jan 31 A senior lawmaker in German
Chancellor Angela Merkel's coalition partner wants the euro zone
to move faster in setting up a fund to tackle failing banks,
undermining a deal agreed in Brussels after years of wrangling.
German Finance Minister Wolfgang Schaeuble had fought to
keep the onus on national governments to take the lead in
resolving their banks' problems.
But Carsten Schneider, the deputy parliamentary group leader
of the Social Democrats, said his parliamentary bloc wanted
easier decision-making rules in the 'resolution fund' for
rescuing or closing failing banks and for the common fund to be
built up faster.
"The aim must be to establish the fund as a European fund as
quickly as possible, and to move away from the complicated
interplay between the compartments and the common fund,"
Schneider wrote in a letter to members of the European
Parliament and obtained by Reuters on Friday.
The European Union's blueprint to close failing banks
foresees a "resolution fund" into which banks are to pay about
55 billion euros ($75 billion) over 10 years.
The money would be used to finance the closing of insolvent
lenders, but initially, in case of a bank wind-down, each
country could only use the amount its own banks contributed. The
share to be used by all would increase each year.
Schneider's comments echo earlier criticisms, such as by
European Parliament President Martin Schulz and by the European
Central Bank, which has called for a shorter five-year
mutualisation period. Schaeuble has been cool to such critics.
The resolution mechanism is part of Europe's banking union
plans, its most ambitious project since the introduction of the
More than five years into a financial storm that toppled
banks and dragged down states from Ireland to Spain, the EU
wants to build a framework to police banks and tackle their
TOO LITTLE TOO LATE
Schneider has sometimes not toed the SPD's party line but he
is the parliamentary faction's finance spokesman for the junior
coalition partner in Merkel's 'grand coalition' and has held
talks on the issue with EU partners.
"We want a functioning European fund which is operational as
quickly as possible, preferably from the outset," Schneider
wrote in his letter. "Likewise, we feel that the target size of
the fund, currently 55 billion euros, seems too low."
He added that it may be an option to allow the fund to
borrow on capital markets in order to start working quickly and
that banks should not be allowed to deduct the levy from their
In addition, the rules on how to make decisions on the use
of the fund were "complicated and difficult to implement in
practice" and, while a secure legal base was needed, there may
be another option than the intergovernmental approach, he said.
"Particularly in the initial years when the fund is being
built up, it should be ensured that the (fund's) board is able
to take decisions allowing banks to be resolved without being
subject to political decisions," he wrote.
The deal is still subject to talks between the EU
Commission, finance ministers and the European Parliament, from
where it has come under strong criticism and which is up for
election in May.
($1 = 0.7373 euros)
(Reporting by Annika Breidthardt, Gernot Heller and Matthias
Sobolewski; Writing by Annika Breidthardt; Editing by Ruth