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Euro zone to speed up banking union

Tuesday, May 07, 2013 - 02:22

May 7 - Unemployment and banking union - two key areas which need to be addressed if the euro zone is to overcome its troubles any time soon. That's the view of many as a conference on the future of the euro zone takes place in Brussels. Joanna Partridge reports

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Where does the euro zone go from here? Top European officials have been discussing implementing banking union and cutting unemployment. European Commission President Jose Manuel Barroso was among those discussing economic and monetary union. (SOUNDBITE) (English) EUROPEAN COMMISSION JOSE MANUEL BARROSO, SAYING: "This is the new reality the crisis has brought to light. It showed that EMU, as it was designed, had indeed become out of date. We'll have to adapt our political and institutional framework to effectively deal with this reality, or it will mercilessly deal with us." The banking union was also on the agenda as German Finance Minister Wolfgang Schaeuble met his French counterpart Pierre Moscovici in Berlin. Pressing ahead with the plans is seen as a crucial part of Europe's drive to overcome its financial crisis. Last month, Germany appeared to slam the brakes on the banking union, saying the EU needed to consider treaty changes before proceeding. But Schaeuble now seems to have softened his stance. Unemployment is a pressing concern for the Spanish and Italian leaders. They've called on their European counterparts to act faster to deal with youth unemployment and the banking union. Italian Prime Minister Enrico Letta wants to focus on those topics at a EU leaders' summit in June. SOUNDBITE: ENRICO LETTA, ITALIAN PRIME MINISTER, ENRICO LETTA, SAYING (Italian): "We need a more solid banking system that can lend money at low interest rates to businesses, small enterprises and medium enterprises which are the core of the Spanish and Italian economies and also because it shouldn't be the case that Europe decides on a banking union and then doesn't implement it." Christian Schulz from Berenberg Bank says a lot still has to be decided before the banking union can be implemented. SOUNDBITE: Christian Schulz, Senior Economist, Berenberg Bank, saying (English): "We need legislation for that, we need the next steps, so I think all these things focus around, what can be done in terms of banking union, what cannot be done. The ECB will obviously get oversight, but what about the oversight." Germany's also holding elections in September. And despite the calls from southern countries for a swift banking union, the government's wary about making European citizens liable for the region's weakened banking sector.

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Euro zone to speed up banking union

Tuesday, May 07, 2013 - 02:22