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Despite strong German opposition, the European Commission on Wednesday unveiled plans to
set up a single body to deal with failing banks.
Regarded as a pillar in Europe's so-called banking union, the new plan would allow the
Commission to shut down any of Europe's struggling banks, even if the national authorities disagree.
The proposal is seen as an attempt to break the vicious link between indebted national
governments and problematic banks. There is like an obvious interdependence in
the Euro zone between States and banking institutions. In the Dexia and Fortis cases just to mention
them as an example, we saw that we didn't have the necessary decision process to resolve
a bank and we are going to put an end to that fragmentation. We are going to equip ourselves
to provide in advance to decide together and resolve together.
Under the Single resolution Mechanism, a resolution fund worth 55 billion euros would
also be set up. However, the new proposal may put the Commission
on a collision course with Germany. The biggest eurozone economy believes that such a mechanism
is not compatible with EU treaties. We put on the table of Heads of States, governments
and MEP's, a capital requirement fund, a single supervision and now we are putting on the
table the tools and means to organise well-prepared resolution and repair.
Earlier in June, EU leaders agreed to make a decision on the mechanism by the end of
2013, leaving time to be adopted before the end of the current European Parliament term
in 2014.