The 27 states of the European Union have reached an agreement overnight on the single supervision of banks in the euro area. The agreement was reached in Brussels after a 17-hour negotiating marathon at Ecofin and was announced by EU internal market commissioner Michel Barnier. "Accord historique superviseur!" tweeted Barnier, who then specified that the union will be operational from March 1, 2014.
Albeit with difficulty and with another night marathon, Ecofin has therefore managed to find an agreement before the summit of the leaders of the 27, who will meet today to approve the definitive text, before the final passage to the European Parliament. After a first round of public negotiations, the EU finance ministers have reached the necessary compromise not to disappoint the expectations of the Europeans, to whom they had promised a decision by the end of the year, and not to leave today's summit without the fundamental brick for the strengthening of governance, the theme at the center of the summit.
Single supervision represents the first phase of the banking union: from 1 March 2014, the ECB will have the power to monitor all banks in the euro area - and in countries outside the single currency that will join the union - with assets for at least 30 billion euros or representing 20% of the country's GDP. Banks below that threshold (practically all Landesbanks, as Germany wanted) will remain under the supervision of national authorities and the EBA. There will be more than 100, at least immediately, the banks that will instead end up under the supervision of Frankfurt from March 2014. The agreement on single banking supervision is "the first fundamental step towards the banking union", and has the objective of "restoring confidence in the system and break the vicious circle between banks and debt crises», said Barnier at the end of the meeting.
The one studied by the ministers is a "general approach" to single supervision, which clarifies all the doubts of the most skeptical countries, such as Germany, Sweden and Great Britain, which until the end tried to assert their positions. Berlin wanted to ensure that the ECB did not overlap its tasks of defining monetary policy and supervision: it was satisfied, with the creation of a "mediation body" which will take decisions in the event that the Board of Governors of the ECB has to objections to the decisions of the "Board of Supervisors", the new ECB supervisory body. The mediator will be composed of one member of each national authority, and therefore the ultimate decision will be of the states.
Great Britain and Sweden had doubts about the excessive power that euro countries will acquire within the EBA, the national authority in charge today of supervising EU banks. During the vote, the euro countries would have had 17 votes against the 10 of the others, therefore it was decided to vote with a double majority: to approve the regulations, a majority of the euro countries and that of the non-euro countries will be needed . Finally, the doubts of the non-Euro countries that will join the single supervision have also been clarified (so far only Great Britain, Sweden and the Czech Republic have been called out), who feared counting less by not having representation in the ECB. The agreement ensures "equal rights" for everyone, both in the "Board of Supervisors" and in the mediation body.
Single supervision is the first stage of banking union, and also paves the way for the direct recapitalization of banks by the ESM state-saving fund, a necessary step in order not to burden public debts with operations to support banks in difficulty (today aid is given to the States and not directly to the banks). As Barnier explained, until the single supervision is operational, the ESM will be able to ask for individual intervention by the ECB on the bank it wants to recapitalize.
