• Tue
  • Jul 22, 2014
  • Updated: 4:54pm
NewsWorld
EU SUMMIT

Single supervisor for euro-zone banks, but no start date

EU leaders agree to try to get plan this year for super-regulator which would begin work in 2013

PUBLISHED : Saturday, 20 October, 2012, 12:00am
UPDATED : Saturday, 20 October, 2012, 10:53am

European leaders took a step towards creating a single supervisor for thousands of euro-zone banks from next year but refused to pin down a start date.

Although the leaders said their decisions on the watchdog were key to shoring up lenders and eventually giving them access to loans from Europe's bailout fund, many observers were struggling to figure out exactly what had been achieved.

"It is good for Europe that we'll have a single supervisory mechanism up and running in the course of 2013," said Herman Van Rompuy, president of the European Council, which includes the leaders of all 27 European Union countries.

That appeared to go half a step further than the statement the EU heads of state and government adopted after all-night negotiations, which only committed to trying to get a plan for the banking supervisor in place by January 1 and working in 2013 on getting it operational.

German Chancellor Angela Merkel said it was not about "trying to bargain for extra days or months" but ensuring a "solid legal framework" by year end.

Merkel also denied she was playing politics on the banking supervisor after suggestions she was pushing it off until after German elections next autumn. She said: "I have no link in mind between the upcoming elections and the banking authority."

She highlighted "considerable imbalances" in euro zone and EU economic performance as the real issue, albeit masked by "calm" on markets.

French President Francois Hollande said it was "a good deal" to be getting on with. But he resisted a German push to change the EU treaty next year after a December summit that is meant to nail down "concrete" moves to tighten centralisation of economic policy.

He also urged a "quick decision" on the resumption of Greece's long-paused bailout, with leaders' praise suggesting a more sympathetic hearing for the two-year extension Athens wants on its commitments.

Spanish Prime Minister Mariano Rajoy said he doesn't feel pressure to request a full bailout for his nation and said it was "very good" that the European Central Bank's unlimited bond-buying programme was available if necessary.

"I'm not going to take into account any pressure that people might exert on me, but frankly no one is doing that," Rajoy said.

Markets in Europe appeared unimpressed, with Germany's DAX ending down 0.8 per cent, while the CAC-40 in France fell 0.9 per cent. Britain's FTSE 100 index closed 0.3 per cent lower at 5,896. US stocks were down, too, with the Dow Jones industrial average 1.3 per cent lower at 13,320 and the broader S&P 500 index 1.4 per cent lower at 1,437.

Additional reporting by Agence France-Presse

 

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