Banking Union: EU Commission Proposes Central Control Over All Restructing of National Banks

[C. Flower]

Thanks to WhistleblowerIrl for pointing out to me this FT front page from Friday.

The EU Commission is pushing hard for centralised control of all EU banks, large and small, that would take decisions about bailing out, restructuring or closing down banks out of the hands of National Governments.

Germany is demanding central control, but only of larger banks - as there are small local savings banks in Germany that are very strongly politically connected.

The EU Commission and the ECB, which takes the German line, are in conflict over this.

Many of the (exposed) bank insolvencies of the last five years have taken place in smaller instititutions in Ireland, Spain and elsewhere.

The FT suggests that the banking union would involve rescue of banks "like Spain and Ireland's" directly by the ECB, rather than at national level, from the 500 bn rescue fund.

Of course, in reality there is no intention of back-dating this arrangement - Ireland would be stuck with its debt, along with the insanely unrealistic requirements for rapid debt reduction, for which we voted recently.

In any event, 500 billion is a drop in the ocean, in terms of the gaps in the EU banks.

This summer, as predicted, has not been an idle one in Europe. All kinds of "ready to go" measures will be sprung on us this month, to take advantage of the inevitable return to the cliff edge of the financial crisis, accelerated by bond repayments and market pressures.


http://www.ft.com/intl/cms/s/0/1f8ca...#axzz25OREpGPS

The European Central Bank would be given sweeping authority over all 6,000 eurozone banks under a plan being drawn up by the European Commission, putting Brussels on a collision course with Germany and the ECB itself, which have urged a more decentralised first step towards “banking union”.
The plan, agreed at a meeting this week between top aides to José Manuel Barroso, commission president, and Michel Barnier, the EU’s senior financial regulator, would strip existing national supervisors of almost all authority to shut down or restructure their countries’ failing banks, giving those powers to Frankfurt.

Under the proposal, ultimate authority would pass to a new ECB “supervisory board” separate from the ECB’s existing governing council. Although its make-up is still being debated, the leading plan would create a 23-member board: a national representative from each eurozone country plus six independent members, including its chair and vice-chair.

[Captain Con O'Sullivan]

That ain't going to happen as Cameron will have to veto it on behalf of the City of London. This could finish off the coalition in the UK as the LibDems and Conservatives will both fracture down the middle on any such suggestion.

Any ECB oversight over City of London is a straightforward veto from the UK.

[C. Flower]

That ain't going to happen as Cameron will have to veto it on behalf of the City of London. This could finish off the coalition in the UK as the LibDems and Conservatives will both fracture down the middle on any such suggestion.

Any ECB oversight over City of London is a straightforward veto from the UK.

Has the UK not been looking for tighter regulation of banks than the EU ?

If so, perhaps they would look for some kind of opt out.

It would be a nonsense to have regulation only of larger banks. The banks would fracture, and you would get a multiplicity of new small banks.

Quite a few events in the next few days -

http://www.politicalworld.org/showthread.php?t=10318

--Monday, Sept. 3: Euro-zone August manufacturing PMI data.
--Wednesday, Sept. 5: Euro-zone August services PMI data.
--Thursday, Sept. 6: ECB rate decision and press conference. Revised EU 2Q GDP data.
--Wednesday, Sept. 12: German constitutional ruling on European Stability Mechanism injunction

Germany as usual is worried about inflation.

[Captain Con O'Sullivan]

Germany,as usual, is looking to dominate Europe. One way or another.

[C. Flower]

http://yanisvaroufakis.eu/2012/09/04...-banks-stupid/

Yanis Varoufakis thinks that Germany will not allow full centralised regulation because it is hiding the fact that German banks are insolvent.

[DCon]

Enda's way (he said in the Dail yesterday that he wants EVERY bank supervised by the ECB) or Frankfurt's way?

German ruling coalition lawmakers to propose to parliament that ECB should only supervise systemically relevant or cross-border banks – Document

http://www.forexlive.com/blog/2012/0...anks-document/


Meanwhile,

Five of the six biggest countries in the EU, excluding Britain, have called for a radical overhaul of European foreign and defence policies to create a powerful new pan-European foreign ministry, majority voting on common foreign policies to bypass a British veto, a possible European army, and a single market for EU defence industries.

The German-led push, supported by 11 of 27 EU countries, embraces recent calls in Berlin and Brussels for a directly elected European president, sweeping new powers for the European parliament, and further splitting of the EU by creating a new parliamentary sub-chamber for the 17 countries of the eurozone.

This will eventually morph into Britain not having a Save the City veto

http://www.guardian.co.uk/world/2012...olicy-overhaul

[DCon]

The Express not happy with the "gang" of 11

A GANG of 11 European nations ignited anger last night by calling for sweeping new powers in Brussels including the command of a European army.
The Future of Europe Group, which excludes the UK, wants the EU to be turned into a global superpower.

Nigel Farage, leader of the UK Independence Party, said: “Here are the bones of a new federal Europe with military capability, with the ability to amend its own treaties without the need for referendums and all the
attributes of a state.

http://www.express.co.uk/posts/view/...ded-from-talks

[unspecific]

Phased in between 2014-2019, new elements of the Lisbon Treaty kick-in, meaning consensus voting is removed from a few more areas in the European Council(Merkel-level). If further integration of the eurozone happens, the 17 eurozone states voting as a bloc will be able to push anything through. This means that unless some exceptional agreement can be come to, the UK very shortly has to decide if it will be tied to an EU where it (potentially) has little say or to bite the bullet and have that referendum and leave.

[ang]

How to Kill a Banking Union the German Way -

The most effective way to block any measure in the European Union is to say it requires a treaty change. This is the sucker punch German Finance Minister Wolfgang Schaeuble delivered at an April 13 meeting with his EU counterparts in Dublin.

The obvious conclusion to draw is that Germany is even more opposed to the establishment of a banking union than it is to renegotiating the EU's treaties

http://www.bloomberg.com/news/2013-0...erman-way.html

[ibis]

How to Kill a Banking Union the German Way -

http://www.bloomberg.com/news/2013-0...erman-way.html

Yup. Nobody will want to try to get treaty changes through at the moment, although, put the right way, changes for banking control might be just about doable...particularly if it's obvious that it makes the Germans unhappy. This could backfire.

[C. Flower]

But seriously, it would require a Treaty change, and much of what has gone through in the last five years, severally or cumulatively, required a Treaty Change.

Or else abandon the pretence that the Treaties are how we do things in Europe.

[ibis]

But seriously, it would require a Treaty change, and much of what has gone through in the last five years, severally or cumulatively, required a Treaty Change.

Or else abandon the pretence that the Treaties are how we do things in Europe.

The Treaties are how we do things, but the Treaties are essentially a contract, and contract law is fundamentally determined by the will of the parties to the contract. If the Treaties can be made to bear an interpretation, then the if joint will of all parties favours that interpretation, that is the correct interpretation.

[C. Flower]

The Treaties are how we do things, but the Treaties are essentially a contract, and contract law is fundamentally determined by the will of the parties to the contract. If the Treaties can be made to bear an interpretation, then the if joint will of all parties favours that interpretation, that is the correct interpretation.

If.



And a great deal has been very deliberately done outside the Treaties - at a certain point, that begins to make a mockery.

[ibis]

If.



And a great deal has been very deliberately done outside the Treaties - at a certain point, that begins to make a mockery.

At a certain point, it does become an issue, but within the limits of interpretation I'm afraid "mockery" is very much a personal judgement.

[C. Flower]

At a certain point, it does become an issue, but within the limits of interpretation I'm afraid "mockery" is very much a personal judgement.

The mockery applies not to the interpretation ( which is what it is, and if unchallenged, stays so) but to the major operations/manoevers outside of the main EU treaties.