At the last Finance Ministers meeting in Brussels, Commissioner Barnier provided an update on progress, including plans to deal with issues for European Central Bank (ECB) monetary and supervisory function separation, opt-in countries protections and the role of national authorities. He in turn called on the member states to complete the legislative framework so the ECB can begin phasing in during 2013. Ministers also heard from the ECB that opt-in countries will be able to participate fully via the 'silent consent procedure' and that the ECB was ready to be subject to European Banking Authority (EBA) binding decisions like any other EU supervisor. The ECB wants to retain legal competence over all banks, but decentralise to national authorities, with the right of initiative concerning macroprudential tools.
Progress has also been made on the role of the EBA, which is the only part of the proposals that MEPs get a say in. Here, the big issues are still the treatment of 'opt-in' countries and changes to voting rights for the 'out' countries. Political tensions continue around whether the EBA will require additional powers to prevent the new supervisory bloc distorting the single market. MEPs say this will depend on whether banking union a majority of non-Euro member states decide to join.
The challenge now is on the timing: the original January 2013 start date seems challenging, with a number of difficult political issues to be resolved, in very little time. Finance Ministers meet again on 4 December to try and reach agreement, with MEPs planning to vote on 11 December. Already there are some member states calling for a delay to get the details right. But with so much else on the agenda, the danger is that any slips in the schedule will have a detrimental effect on other discussions – and the markets might not wait for the details to be perfect.
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