Eurozone edges towards key goal

“Remarkable progress on banking union,” announces La Vanguardia. On December 10, an initial agreement was concluded by Eurozone finance ministers for the creation of a European authority with the power to decide whether to close or grant assistance to banks in difficulty. For the daily, this decision amounts to a “decisive step” towards banking union —

This progress is very important, because the union could become a decisive factor in the normalisation of lending to businesses and families, and thus offer a notable means of support for recovery in Europe. [...] Progress has been made on the acceptance of the European Commission as a the overseer of a mechanism to restructure and liquidate banks, a very delicate task that it will share with member states.

This point is one of the three pillars of the banking union, along with the supervision of banks by the ECB, which has already been launched, and the deposit guarantee fund. This last measure is still under discussion, but “giant steps forward” have been achieved in reconciling opposing positions, and a “mixed solution” has been found that will make use of form of umbrella fund to which national funds will “be attached” during a 10 year transition period.

The final details will be ironed out at the European Council meeting on December 19 and 20.