MEPs threaten to delay plans for banking union

By CLAIRE DAVENPORT
Published on 03/11/2012 00:00

European parliament lawmakers said yesterday they could hold up plans for a eurozone banking union after member states ignored the parliament’s demands over gender balance on the Central Bank’s board.

The parliament last week voted against member states’ choice of Luxembourg central banker Yves Mersch for a vacant post on the ECB executive board, demanding greater efforts to find a female candidate for the job.

But the 27 member states on Wednesday launched the final formal step to appoint Mersch. Confirmation is now expected on Monday.

Sylvie Goulard, a French liberal member of the parliament’s economics committee, said the member states’ bulldozing of Mersch’s appointment could cause a delay in a banking union, which is designed to stabilise the eurozone financial system. “Do you really think they will get a decision on time and with mutual trust if they go ahead like this?” she said.

The banking union was announced in September by the European Commission, the EU executive.

The European Parliament and the EU states are aiming to complete the project by the end of the year.

The union is set to have three major steps: the ECB takes over monitoring eurozone banks and others that sign up; a single fund is created to close down and settle the debts of failed banks; and a comprehensive scheme to protect savers’ deposits is established.

In spite of their threats, the parliament has limited say on the proposal.

Its main power is an equal say with the member states over the role of the existing European Banking Authority under the new structure, a small but important element of the entire proposal.