BERLIN (AP) ― A top German government official on Wednesday dashed hopes of swift progress on strengthening Europe’s financial sector, saying this week’s summit of the bloc’s 27 leaders won’t make any final decisions on setting up a single banking supervisor.
Many “legal, technical and political details” for a continent-wide supervisory authority still have to be hammered out, said the official, who briefed reporters on condition of anonymity in line with government policy.
The single supervisor is part of the so-called banking union plan ― one of the key projects to bind the 17 countries that use the euro closer together. By creating closer financial and political ties, the eurozone’s leaders hope to secure the future of their currency.
The European Union’s executive Commission, the European Central Bank and several EU nations such as Spain and France would like to see the new system in place on Jan. 1 but Germany has hit the brakes. Chancellor Angela Merkel has repeatedly stressed that “quality must trump speed.”
But many details of the plan remain controversial, not least whether a joint supervisor will be accompanied by a Europe-wide bailout fund to keep bank failures from wrecking individual governments’ finances. Many European leaders fear seeing their taxpayers’ money spent to bail out banks in other countries without having a say in the decision.
The official in Berlin stressed that European leaders will only “reiterate their basic readiness” to create a banking union at their meeting in Brussels on Thursday and Friday. He insisted that leaders at their summit in June did not commit to any starting date for the mechanism and said: “We want to work fast but thoroughly.”
The leaders’ agenda at Thursday’s summit is set to feature items that could be even more indigestible: long-term proposals for overhauling the EU, deepening economic and political integration.
