EU finance ministers met yesterday to seek progress on how to close down a failing bank before it damages the underlying economy, a divisive issue for those reluctant to hand more power to Brussels.
Sharp differences emerged on Friday at informal talks in Vilnius over a planned Banking Union, the new regulatory framework meant to ensure that the taxpayer no longer foots the bill for bailing out over-extended bans.
The idea was accepted initially as essential to head off future crises, but several member states, including Germany and non-euro UK, are now uneasy about how it will be implemented in practice.
“So far there have been cannon shots going back and forth,” Dutch Finance Minister Jeroen Dijsselbloem said as he went into yesterday’s meeting.
Dijsselbloem, who is also head of the 17 eurozone finance ministers group, added: “We will have an interesting debate over the next few months ... we should have these discussions rather quickly and finish by November, December.”
He insisted that the Banking Union plan was not being watered down, noting that much progress had been made, with the first step, the Single Supervisory Mechanism, approved on Thursday by the European Parliament.