A proposed common-deposit guarantee system isn’t possible under EU law, and would have to be created by a treaty of participating countries, said German finance minister Wolfgang Schaeuble yesterday.
The deposit-guarantee plan is part of Europe’s so-called banking union, which also comprises European Central Bank supervision of euro-area banks and the Single Resolution Board housed in Brussels.
Germany has resisted moving forward with the initiative until risks in the banking sector are reduced.
EU finance ministers meeting in Luxembourg, yesterday, acknowledged the “intention of member states to have recourse” to an intergovernmental agreement, rather than EU law, when “political negotiations” begin on the proposal.
Previously, a treaty was needed to get the resolution authority over the finish line.
“Many of my colleagues share the German position,” Mr Schaeuble told reporters.
“That’s why we will insist on this. Those who want something else will at some stage have to change European primary law, but I think we have other problems at the moment.”
The Netherlands, which holds the EU’s rotating presidency, has told member states they should consider alternatives to the common deposit-insurance system proposed last year.
Mr Schaeuble acknowledged that there’s little appetite among EU policymakers to resort once more to a treaty.
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