First the central banking supervisory authority, now the mechanism for the restructuring of credit institutions. These are the two main building blocks that will make up the future banking union. Despite the general agreement on both reached a year ago, Germany continues to appear perplexed, citing technical-juridical problems to hinder their speedy implementation.
In recent days, the so-called Single Resolution Mechanism (Srm) has been targeted by Teutonic criticism in particular. According to the proposal of the EU Commission presented on Wednesday by the commissioner for the internal market, Michel Barnier, the decision to recapitalise, restructure or close a bank in the Eurozone should henceforth rest with Brussels. In other words, a European agency with three hundred employees would have the power to decide the fate of each institution, bypassing the national authorities.
But there's more. Within the governing council of the agency, the EU Commission would in some cases be endowed with the power to decide autonomously, without taking into consideration the positions of the representatives of the national governments. It would be a matter of no small importance from the intergovernmental method to the community method, which has remained in the shadows since the beginning of the debt crisis.
Berlin is on a war footing. With her also The Hague, Tallinn, Bratislava and Helsinki. For the Germans, the problem is twofold. On the one hand, the more malignant observers point out that Germany has no interest in subjecting its banks, which have long been among the most opaque in Europe, to third-party supervision. Even more so if, in the end, it does not have any veto power, but even has to submit to the decisions taken by EU bureaucrats. On the other hand, such a body would not be democratically legitimized and would risk being rejected by the Constitutional Tribunal of Karlsruhe.
This is why in German executive circles there is talk of transferring this competence to the ESM, already firmly in German hands and whose decisions must be anticipated by authorization resolutions from the Bundestag. Add to this the fear that the banking union will become the Transferunion feared on several occasions in recent years, through which German taxpayers' money would be used to restore the credit institutions of southern Europe. Not to mention, finally, that many members of the Christian-liberal majority are per se skeptical of the legal basis of the Commission's proposal.
Barnier bases the need for the creation of such a body on article 114 TFEU, which attributes to the EU the competence to issue legislative acts aimed at guaranteeing the functioning of the internal market. For Barnier, a healthy banking sector would be a fundamental condition for having a functioning internal market. But there are those who doubt the soundness of his interpretation. However, a treaty change does not appear to be a viable option either. It would take too long, frustrating every expectation, not least that of ECB President Mario Draghi, to have a banking union active as soon as possible.
