Germany, France split over EU banks plan
By Gernot Heller and Leigh Thomas
BERLIN/PARIS - (Reuters) - Germany and France were split on Friday over European Union plans for a new agency to wind down troubled banks, with Berlin saying they go too far in centralizing control in Brussels.
The body would form part of a banking union designed to underpin confidence in the euro zone and end the previously chaotic handling of cross-border bank collapses.
But German Finance Minister Wolfgang Schaeuble said in a letter to the EU official in charge of the plans that the European Commission is trying to pocket too much power.
Schaeuble wrote in his letter to Michel Barnier, Commissioner for Internal Market and Services, that the proposal for the Commission to make the final decision on whether to wind down banks was out of step with European Union law.
"The proposal published by the Commission regrettably envisages too high a degree of centralization with regard to the boundaries of the existing (EU) law," reads the letter, which was seen by Reuters on Friday and is dated July 11.
"The proposal does not match the current legal, political and economic realities and would create major risks," Schaeuble wrote, adding that the transfer of powers to the Commission was not backed by EU treaties.
French Finance Minister Pierre Moscovici welcomed the proposal, saying it would be a pillar of the euro zone's new banking union.
"Now we have to work out the details of the mechanism for resolving banking crises within the euro zone, which requires the capacity to respond quickly," Moscovici said in a statement. Continued...