Not Fit for the Next Crisis: Europe's Brittle Banking Union
http://www.spiegel.de/international/business/weak-eu-banking-union-could-have-dangerous-side-effects-a-940065.html
German Finance Minister Wolfgang Schäuble has negotiated a European banking union suited perfectly to his country's tastes. It looks like a victory, but it could prove to be very expensive if Europe or Germany face another financial crisis.
Not Fit for the Next Crisis: Europe's Brittle Banking Union
An Analysis By Gregor Peter Schmitz in Brussels
December 19, 2013 01:59 PM
Lawyers are often sharp people, but they sometimes live dangerously -- with a tendency to gloat so much that they lose track of what is actually right.
When German Finance Minister Wolfgang Schäuble, a trained lawyer, announced an agreement on Wednesday night in Brussels on the long negotiated EU banking union, observers might have been left thinking that he is precisely this type of lawyer.
On paper, Schäuble and his negotiators are right about very many points. They succeeded in ensuring that in 2016, the Single Resolution Mechanism will go into effect alongside the European Union banking supervisory authority. The provision will mean that failing banks inside the euro zone can be liquidated in the future without requiring German taxpayers to cover the costs of mountains of debt built up by Italian or Spanish institutes.
They also backed the European Commission, which wanted to become the top decision-maker when it comes to liquidating banks. The Commission will now be allowed to make formal decisions, but only in close coordination with national ministers from the member states.