BERLIN Dec 9 German Finance Minster Wolfgang
Schaeuble has signalled a readiness to compromise on the
European Union's planned banking union and said leaders are
working intensively to agree on a legal framework by Christmas,
German media reported.
His comments will revive hopes that European leaders can
finish planning a single supervisory mechanism for euro zone
banks under the European Central Bank (ECB) by the end of the
year as originally planned.
EU finance ministers had been at odds over how the mechanism
should be structured and how much power the ECB should have,
particularly if it conflicts with its monetary policy aims.
"We are working intensely to get the legal framework for a
banking supervisor settled before Christmas," Schaeuble told
German newspaper Bild am Sonntag, in an interview published on
"We can start building up the supervisory body in 2013," he
Spiegel magazine reported that Schaeuble was prepared to
seek a compromise with France by suggesting the supervisory body
could be domiciled in Paris, rather than at the ECB's
headquarters in Frankfurt.
Finance ministers are due to meet on Dec. 12, the day before
a European Union summit, to try and reach an agreement before EU
Once the legalities are worked out, the ECB is expected to
steadily take over responsibility for overseeing all 6,000 euro
zone banks, taking up to a year to complete the process.
Negotiating differences had dominated in previous meetings
to discuss the banking union. Schaeuble, in contrast to French
Finance Minister Pierre Moscovici, did not want the final say on
supervisory issues to rest with the ECB's governing council.
According to Spiegel, Schaeuble wants a clear separation
between the ECB's supervisory and monetary policy duties.
Placing the supervisory body in Paris could help achieve this.
Bundesbank chief Jens Weidmann echoed Schaeuble's call for a
clear separation of monetary policy and supervision and called
for a change to the European constitution in order to clarify
the separation, in an interview with Welt am Sonntag newspaper.
"I cannot see how with the current legal framework we can
transfer supervisory duties to the ECB. A clean legal solution
would require a change to the constitution," he told the paper.
Such a change would require extra time and could delay the
introduction of an EU-wide banking union. But he added: "If
politicians really want a banking union, then they will be able
to make the necessary political decisions swiftly."
(Reporting by Alexandra Hudson; editing by Jane Baird)