In a week that sees three former Anglo executives go on trial, the European Parliament is ploughing ahead with its plans to ensure ailing Eurozone banks can be wound down overnight – and with minimum cost to the taxpayer.
‘In Ireland we know better than most just how tightly governments and banks can be intertwined,’ Nessa Childers, independent MEP, said from Strasbourg, where voting on the issue is taking place today. ‘So allowing a central European organisation to tackle struggling financial institutions in a timely and efficient manner can certainly be of benefit to the Irish taxpayer.’
The Single Resolution Mechanism system will get off the ground next year – but member states, the Parliament and Commissioners must first agree on the particulars, which they have been bashing out all week.
‘More than five years on, many people in this country quite rightly still question why the ordinary man and woman on the street had to shoulder the enormous cost of saving the very institutions which almost brought down our economy,’ Ms Childers added.
‘I’d hope that the SRM can provide a better, more efficient level of expertise – if we ever need to wind down an Irish-based bank again, it can be done via this system without crippling costs.’
Although it had originally been proposed that individual countries stay out of the process completely, Germany in particular – fearing it will have to pick up the final tab – has been eager to retain some control. And this week, it seems Angela Merkel got her way: the financial services commissioner Michel Barnier acknowledged on Tuesday that limited intergovernmental involvement was necessary.
Ms Childers, who is running for re-election in the Dublin constituency in May, also urged some caution: ‘I am always wary of high-ranking European officials meddling in Irish financial affairs without full accountability – the Troika should be sufficient warning of that.’
She therefore said she would be closely monitoring the proposal’s fine print.
The SRM will have access to a €55billion pool – a sum that will have to be raised gradually via bank levies in Ireland and other member states.
It is hoped that the streamlined system, as well as the creation of a European banking regulator, will help restore shattered confidence in financial institutions across the Union.