Europe divided over plan to protect taxpayers from cost of bank failures
The protracted talks show the politically charged nature of the plan to disentangle states and the banks from which they borrow. A future agency to wind down failing banks, and a fund to pay for the clean-up, will complement European Central Bank supervision of eurozone banks.
A final deal between countries and the European Parliament had been pencilled in for this week but ministers entering the second day of talks yesterday conceded that it may take longer because of deep differences.
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Hide AdDivisions were laid bare as Spain and the Netherlands sought to win over a reluctant Germany to support the ‘resolution’ fund from its outset, when it will be small. Such support could take the form of credit or guarantees to show investors the fund has enough cash to deal with failing lenders from the beginning.
“This is important for the signal it sends to markets,” Spain’s Economy Minister Luis de Guindos said of the wider banking union. He joined Dutch finance minister Jeroen Dijsselbloem in flagging the need for countries to club together in tackling problem banks.