Delay in banking union hits deal hopes

Delays to setting up a European banking union will have huge implications for the Government’s attempts to secure a deal on restructuring the €64 billion of bank debt.

The latest meeting of finance ministers in Brussels ended in disagreement about how a banking union would operate.

The German finance minister Wolfgang Schaeuble is implacably opposed to including 6,000 German regional banks in the banking union. Moreover, he has again publicly questioned the wisdom and viability of giving the responsibility of supervising European banks to the ECB — on the basis that it is not compatible with its mandate for price stability.