The ECB and the European Parliament are allied against Berlin in the banking union

Question

Germany dominates European summits fluently, and has been able to set the agenda of the major project for the coming years, the banking union, according to their interests. But the Union has other springs that Berlin can not always control with an iron fist. The German Minister Wolfgang Schaeuble traveled to Brussels on Monday to threaten the Parliament touching a single comma bank resolution mechanism, which includes a pool if you have to close a bank less ambitious than expected when negotiations ripped. But the Parliament's negotiating team, decided to comb mechanism that despite more than possible tantrum Berlin, has initiated a series of meetings with the leadership of the ECB to ensure support in this battle, key for European medium-term project and key short, facing elections. On Tuesday, one of the directors of the ECB was cited with several members of Parliament both institutions laid the foundation of a joint position to amend the mechanism.

Parliament rejects the method: Germany prompted an intergovernmental agreement, to be the capital who have the upper hand. But beyond institutional guerrilla war, the Parliament and the ECB agree to be modified at least two things. A: The decision making process is too complex, and the idea of ​​the ECB - clamp is that the Parliament has more power Eurobanco decision and report to the House. And two: the mechanism creates a resolution fund, but during a transition period of 10 years will not be treated in a pool (just be pooling), but will be divided into national watertight compartments, only at the end of those 10 years there will be a truly European bank resolution. The ECB and the European Parliament have agreed to give battle to reduce the long transition period to five years, against the criterion of Germany, who see these changes as a threat by the possibility of having to scratch your pocket ahead of schedule.

The ECB criticized in their day with unusual harshness Berlin proposals, which were approved at the end almost unchanged. But after the covenant at Ecofin, the Eurobanco toned down and has since kept a low profile, with the flag diplomacy, highlighting the benefits of an agreement to all lights lame compared to the initial ambition. Mario Draghi and company take their chances: they need to act as a credible single supervisory mechanism guarantees, and the current formula is given. Parliament can serve them as a battering ram: French director Benoit Coeure, that after the withdrawal of Jörg Asmussen is one of the strongest men in Frankfurt, said publicly Thursday what the ECB had negotiated Tuesday backstage at the Parliament: be reduced to five years of the transitional period, the decision should be simplified, and firewalls should be more powerful. Tomorrow a new round of meetings, which in theory should be the last open. But the sources admit that the deadlines are extended. The battle, including threats, has only just begun.