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Germany seeks to go slowly in promising ECB banking supervision by year-end
By John Rega ( October 11, 2012, 16:20 GMT | Insight) -- Brussels – Germany is arguing for a go-slow approach to putting the European Central Bank (ECB) in charge of supervising banks, as European Union leaders seek to maintain momentum for the plan.
German representatives sought to scale back a pledge to have the ‘single supervisory mechanism’ in place for euro-area banks by the end of the year, during talks among senior national diplomats in Brussels today.
In place of a proposed call to complete the ‘single supervisory mechanism’ by the end of the year, German diplomats suggested that EU leaders pledge merely to consider it by then. The draft language, seen by MLex, would still describe the shakeup “as a matter of priority.” Supporters included the Dutch delegation.
The statement under discussion is a draft of the conclusions that heads of the EU governments would issue as conclusions of their summit meeting on 18-19 October. Such statements aim to give political support to policies but are not binding. Many endorsed initiatives run into difficulty during negotiating on the details of legislation.
Softening the leaders’ commitment could give more room in negotiations for Germany and some other countries to seek changes within the legislation proposed by the European Commission.
The measure – considered a precondition for a eurozone bailout fund to directly recapitalise banks – would empower the ECB to take responsibility for licensing of banks in the 17 eurozone countries. The Frankfurt-based central bank would start on 1 January with any banks of its choosing, then pick up the biggest multinationals by mid-year, then all 6,000 or so lenders in the eurozone by the start of 2014.
German officials suggested that the draft summit conclusions call on the ECB to take up its responsibility when it is ready to carry out the duties in practice, not necessarily on the day it receives its mandate, as proposed in the text brought to today’s talks.
With little staff on hand ready to work on supervision, the plan calls for the ECB to delegate most of the day-to-day work to national authorities, in order to focus on decision-making over capital requirements and other prudential matters....
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