* Barnier pushes forward with bank supervision plan
* Monti proposes conference on dangerous populism
* Rehn suggests ECB help may not mean new conditions
By Francesca Landini and Lisa Jucca
CERNOBBIO, Italy, Sept 8 European Union
officials pushed on Saturday to accelerate moves to stem the
bloc's long debt crisis as Italian premier Mario Monti warned
that economic suffering was fuelling divisive nationalism on the
Monti had proposed an EU summit in Rome to discuss the rise
of anti-European populism, divisions between north and south and
nationalistic prejudices that have been fostered by resentment
against austerity measures, he told journalists at an economic
conference in northern Italy.
"Old stereotypes and old tensions have re-emerged," Monti
said. "There are many manifestations of populism that are aimed
at disunity in nearly all the member states."
Monti's remarks at a joint news conference with European
Council president Herman van Rompuy underlined the urgency of
overcoming a crisis that has lasted close to three years.
Van Rompuy said he supported Monti's idea and favoured
bringing forward a meeting to foster European integration from
its originally scheduled date in late 2014.
Michel Barnier, the EU commissioner in charge of financial
regulation, called in a Reuters interview at the conference for
swift joint oversight of all euro zone banks.
Euro zone-wide banking supervision should be introduced by
next January, despite German reservations, he said.
That provided a new focal point in the crisis fighting two
days after the European Central Bank announced a plan to buy
bonds of weak member states to push down their borrowing costs.
EU Economic Affairs Commissioner Olli Rehn told Reuters the
conditions underpinning the ECB plan would be based on existing
recommendations for countries like Spain and Italy.
Speaking on the sidelines of the same conference on the
shores of Lake Como, Rehn appeared to be backing remarks by ECB
executive board member Benoit Coeure who said countries applying
for bond buying help might not have to make extra budget cuts.
The idea of the programme was not to "pile more austerity on
top of austerity" Couere told France Inter radio, addressing a
major concern in Spain and Italy where belt-tightening
programmes have aggravated deep recessions.
CENTRALISED BANK SUPERVISION
Barnier said the EU Commission's banking sector plan
envisaged centralised supervision for all 6,000 euro zone
lenders, though oversight of some day-to-day matters such as
consumer protection would remain with national authorities.
"We know that all banks can cause problems. For this reason
the logic of our proposals and the requests from the euro zone
heads of state is to have a credible oversight of each bank in
the euro zone," Barnier said at the gathering of business
leaders, politicians and EU officials.
"Germany voiced concerns we can understand. They are the
largest (financial) contributor," he said, but hoped Berlin
would support the plan as it favoured sound banking oversight.
EU finance ministers are meeting in Cyprus next week to
discuss centralised banking supervision. German Finance Minister
Wolfgang Schaeuble has said the ECB should only supervise big
banks, and expressed doubts the EU can put in place such a
mechanism by the January 2013 deadline.
But Barnier said on Saturday creating such supervision in
just over a year was "necessary and do-able."
ECB President Mario Draghi unveiled plans on Thursday for
potentially unlimited purchases of bonds with maturities of up
to three years issued by countries that request European aid and
fulfil strict domestic policy conditions.
Rehn said the conditions would be based on existing
country-specific recommendations and "would have to include very
specific objectives and a timeline" on meeting them.
No countries have yet applied for help from the yield
reduction plan, he said.
Italian Economy Minister Vittorio Grilli told reporters at
the Cernobbio conference that Italy did not plan to sign up,
while Spain has said it would discuss conditions attached to the
ECB programme next week with its euro zone partners but was in
no hurry to seek international aid.
Grilli said Italy was on the right road to mending its
debt-laden, stagnating economy but was not "satisfied" yet.
There are concerns inside and outside Italy that a new
government to be elected in polls next spring could try to
renege on some of the painful debt-cutting reforms imposed by
Monti's technocrat government.
Aware of the risk amid increasing public opposition to the
economic pain, Monti's ministers are trying to lock Italy into
those changes so that backsliding will be difficult.
Mainstream parties, particularly the weakened People of
Liberty (PDL) grouping of former Prime Minister Silvio
Berlusconi, are under heavy attack from the rising Five Star
Movement, a populist group led by comedian Beppe Grillo.
He is also a trenchant critic of Monti.