EU leaders yesterday agreed to bring banks under EU-wide supervision next year, but failed to pin down an exact date — dashing hopes of a quick move toward full banking union.
Although loose, the timetable for next year settled during 11 hours of talks at a Brussels summit should eventually pave the way for ailing banks to receive cash directly from Europe’s bailout funds.
The 27 EU leaders set themselves “the objective of agreeing on the legislative framework by 1 January 2013,” a statement said.
Work on actually setting up the body would take place “in the course of 2013,” it added.
German Chancellor Angela Merkel called the timetable “very ambitious,” even as French President Francois Hollande pushed for quick implementation. She said the EU needed “quality before speed” and a watchdog “worthy of the name.”
European Commission President Jose Manuel Barroso said European Central Bank (ECB) President Mario Draghi had told leaders a “reasonable” estimate for implementation would be “less than one year, but certainly more than one or two months.”
“I can’t give you a precise date,” EU President Herman Van Rompuy conceded when pushed during an early-hours press conference.
Finance ministers, next scheduled to meet on Nov. 12, would take up the issue, he said.
Expectations that the new body could begin work from the start of the new year slipped amid discord between Europe’s two powerhouses, one European official saying that even in the “fastest scenario,” it would be “summer 2013.”
A French government source said the ECB would only supervise all 6,000 eurozone banks “from the beginning of 2014.”
The basic idea remains that in future struggling banks in debt-wracked countries that pose a danger to Europe’s financial system could be recapitalized directly from EU bailout funds.