Brussels defends that this mechanism will strengthen Europe’s economic growth and the role of the euro
The virtual meeting of the economy and finance ministers of the eurozone (Eurogroup) this Tuesday served to significantly advance the work plan for the European banking union. According to Eurogroup president Pascal Donohoe, after ten years of hard work, the European Union hopes to reach an agreement on this issue at its meeting in June. “The agreement between states to make progress in the banking union is general,” he confirmed.
The design is the culmination of months of work by the Donohoe team, who led this initiative, which they hope to approve next month, with the European Commission’s proposal ready by the end of the year. The aim is to complete the initiative with a Deposit Guarantee Fund, an item to be negotiated and which aims to protect depositors in the event of bank failure, after the Single Supervisory Mechanism and the Resolution of the Single Supervisory Mechanism were launched after the economic crisis of 2008.
The draft was prepared in close collaboration with the European Central Bank (ECB) and aims to create a more consolidated framework for savings banks, protect users and integrate the banking market. In the words of the director of the European Stability Mechanism, Klaus Reglin, the completion of the banking union will “strengthen European economic growth and improve the role of the euro”. In short, the banking union will serve to achieve greater risk diversification and avoid economic fragmentation on the continent,
Once a political agreement has been reached, the European Commission is ready to move quickly with the legislative instruments needed to complete the Banking Union. “This work is a priority for Brussels to complete the banking union and we believe there is a good basis for reaching an agreement,” said Economy Commissioner Paolo Gentiloni.
Brussels set the Eurogroup meeting as the deadline to reach an agreement and Donohoe’s team is working to achieve it: “It will be difficult, but we are doing everything possible and impossible to reach an agreement by that date”, said Donohoe.
Source: La Verdad
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