Eurozone agrees common bank supervisor..thar she blows
Europe took its first big step towards banking union early on Thursday morning, as eurozone finance ministers agreed a plan to cede power to a common bank supervisor in Frankfurt.
After almost four months of fraught diplomacy that laid bare deep Franco-German divisions, finance ministers brokered terms for the European Central Bank to begin direct supervision of up to 200 eurozone lenders from early 2014.
The reform requires governments to surrender jealously guarded control over national banks, in the most concerted financial integration project since the creation of the single currency.
At the same time, Britain, Sweden and other non-eurozone countries outside the banking union won coveted safeguards to check the power of the ECB and maintain some influence over technical standards applying to all EU banks.
The supervision plan is the first – and probably the easiest – step towards a eurozone banking union designed to shore up confidence, resuscitate cross-border bank lending and bring down painfully high borrowing costs for banks in peripheral eurozone banks.
Germany’s willingness to give some ground paved the way for a deal that beats the EU’s self-imposed year-end deadline.
Michel Barnier, the EU commissioner responsible for the proposal, hailed a “historic agreement” providing a “fundamental element for financial stability in Europe”.
But during the talks, Wolfgang Schäuble, the German finance minister, made plain that one of the key purposes of the reform – to allow common resources in the eurozone’s €500bn rescue fund to be injected directly into ailing banks – was out of the question until well into 2014.
this hasnt been picked up by the news cycle..but its very significant..the euro bloc is giving up its sovereign budgets and treasuries to the technocrats..read between the lines..its all there..