With Germany onside, EU nears banking union deal
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Germany signalled on Wednesday it was ready to back plans to give the European Central Bank new powers to supervise banks across the bloc, raising the prospect of a breakthrough on the European Union's most ambitious financial reform.
Last week France and Germany had clashed openly over parts of the plan, but with little time left for the EU to meet a commitment to complete the framework for a common bank supervisor by the end of the year, both countries redoubled efforts to settle their differences.
"We think that we have a good chance to reach a deal today," Germany's Finance Minister Wolfgang Schaeuble told journalists ahead of a meeting with his European Union peers to agree a plan. "My intention is that we find a solution to the banking union on time before Christmas."
His French counterpart Pierre Moscovici told his colleagues in the meeting that "all the parameters" for an agreement were in place.
After three years of piecemeal crisis-fighting measures, governments are inching towards the creation of a so-called "banking union" that would prevent troubled banks from dragging down sovereign states, as they have in Ireland and Spain.
A single banking supervisor for the euro zone and most other EU states would be a crucial step towards that goal. But even if the bloc agrees to that, other difficult issues will remain, including setting up a resolution authority to close down failed banks and a scheme to protect deposits.
Among the outstanding questions ministers are trying to settle on Wednesday are how many banks the ECB should directly supervise and whether the central bank gets longer than one year, as planned, to take on its role.
A compromise document, obtained by Reuters, won broad backing at the meeting from the ECB and countries including Spain and France.