Publications
Partners
Brussels - EU leaders on Friday agreed to bring banks under bloc-wide supervision next year, but failed to pin down an exact date - dashing hopes of a quick move towards a full banking union.
Although loose, the 2013 timetable settled during 11 hours of talks at a Brussels summit should eventually pave the way for ailing banks to receive cash directly from Europe's bailout funds.
The decision took place in a calmer market environment Thursday, but also against a backdrop of fresh violence in Greece, the origin of the three-year crisis, where a man died during a general strike and anti-austerity protests.
The 27 European Union leaders set themselves "the objective of agreeing on the legislative framework by 1 January 2013," said a statement. Work on actually setting up the body would take place "in the course of 2013", it added.
German Chancellor Angela Merkel called the timetable "very ambitious," even as French President Francois Hollande pushed for quick implementation. She said the EU needed "quality before speed" and a watchdog "worthy of the name."
The European Commission's Jose Manuel Barroso said European Central Bank (ECB) head Mario Draghi had told leaders a "reasonable" estimate for implementation would be "less than one year but certainly more than one or two months."
"I can't give you a precise date," EU President Herman Van Rompuy conceded when pushed during an early-hours press conference. Finance ministers, next scheduled to meet on November 12, would take up the issue, he said.
Expectations that the new body could begin work from the start of the new year slipped amid discord between Europe's two powerhouses, one European official saying that even in the "fastest scenario", it would be "summer 2013."
A French government source said the ECB would only supervise all 6 000 eurozone banks "from the beginning of 2014."
The basic idea remains that in future, struggling banks in debt-wracked countries that pose a danger to Europe's financial system could be recapitalised directly from EU bailout funds.
But a Spanish governmental source said Madrid had "assumed" for the last month - since the German, Dutch and Finnish governments had rowed back on aspects of a provisional agreement dating from June - "that there wasn't going to be a direct recapitalisation."
The Spanish official said the result of independent stress tests was that the recapitalisation would amount to 4.0% of Spain's gross domestic product, "which we can handle."
Hollande said expectations on markets of a sovereign bailout request by Spain had not come up, although he warned that "adding austerity to austerity" by imposing harsh conditions on Madrid would be counter-productive.
Germany has been pushing Madrid back for weeks, and Hollande suggested that next year's German general election lay behind proposals from Berlin to beef up the power of the European Commission to supervise individual countries' budgets.
Eurozone leaders also hailed "good progress" in Greece to carry out reforms aimed at getting its economy back on track, after the so-called 'troika' of international lenders said it hoped for a deal "within days" on resuming much-needed financial aid.
Greece's conservative-led government is in talks with the troika on an austerity package needed to unlock a loan payment of €31.5bn, which has been pending since June.
Greek riot police fired tear gas at protesters on the sidelines of a large anti-austerity rally. A 65-year-old man collapsed and died from a heart attack but it was not immediately clear if his death was linked to the sporadic bursts of tear gas.
Elsewhere at the summit, EU President Herman Van Rompuy invited all 27 EU members to attend the December awarding of the Nobel Peace Prize in Oslo, adding that the hardships the bloc now faced were nothing compared to the post-war era.
Leaders were to return six hours later from 08:00 GMT, to tackle relations with China and discuss hotspots Syria, Iran and Mali.
