Economic and Financial Affairs Council (ECOFIN): extracts from the press conference by Vassos SHIARLY, Cypriot Minister for Finance and Michel BARNIER, Member of the EC in charge of Internal Market and Services
Lieu: Brussels, Belgium-LEX Council
End production: 13/12/2012 First transmission: 13/12/2012
Early Thursday (13 December), Vassos Shiarly, Cypriot Minister for Finance and President-in-office of the Council, and Michel Barnier, Member of the EC in charge of Internal Market and Services announced that EU finance ministers agreed to the framework for a joint eurozone banking supervisor, reaching a deal after more than 14 hours of discussions over the mechanism aimed at restoring confidence in the currency bloc.
The supervisor is intended as a first step towards banking union, and is a prerequisite for the eurozone's permanent rescue fund to directly aid struggling banks.
'Such a development will enable the vicious circle between banks and sovereigns to be broken," said Vassos Shiarley.
The compromise ends months of negotiations that floundered, threatening the timetable of the project, as France and Germany disagreed over issues including the scope of the supervisor and the independence of the European Central Bank, under whose auspices it will operate.
In addition, the supervisor will only routinely oversee banks with total assets worth more than 30 billion euros (49 billion dollars) or 20 per cent of gross domestic product - allowing Germany's small, regional banks to stay under national oversight.
The regulatory framework is to be set up by March 1, 2013, enabling the supervisor to start work one year later, a delay of three months on the originally envisaged timetable.
The ministers also agreed on complex voting procedures to ensure that non-euro members wanting to join the supervisor body would not be at a disadvantage.
The agreement came hours before a Brussels summit of EU leaders.
Only the original language version is authentic and it prevails in the event of its differing from the translated versions.
||Vassos Shiarly, Cypriot Minister for Finance, and Michel Barnier, Member of the EC in charge of Internal Market and Services, arriving
||SOUNDBITE (in English) Vassos Shiarly, Cypriot Minister for Finance and President-in-office of the Council: The plan involves the establishment of the single supervisory mechanism, the ESSM under which the EU Central Bank in cooperation with the national supervisors will be responsible for overseeing the banking institutions. The overall aim is to restore confidence in the banking industry. The establishment of the SSM is a necessary precondition for the stability mechanism to contribute directly to bank recapitalization rather than doing so by national treasuries as it can be the case. Such a development will unable the vicious circle between the banks and sovereignty to be broken
||SOUNDBITE (in French) Michel Barnier, Member of the EC in charge of Internal Market and Services, saying that: What is it bout in this text? To oversee together, to supervise together and to take measures at EU level regarding a banking sector which includes thousands of banks operating are cross border. Such banks when having problems provoke negative consequences beyond borders.
||SOUNDBITE (in English) Vassos Shiarly: One distribution of tasks and competencies between ECB and national competent authorities. Two voting arrangements in the supervisory board. Three voting arrangements in the EU banking authority. Four decree to which within the non–EU Member States participating to the SSM will be bound by decisions change the result of voting in the governing council on which they are not represented.
||SOUNDBITE (in French) Michel Barnier saying that: From the promulgation of the text which under the approval of the EU Parliament early this year. During one year, the ECB will do preparatory work such as setting rules, hiring a team of experts. The ECB will be ready to operate effectively on the 1st March 2014.
||SOUNDBITE (in English) Vassos Shiarly: As the Presidency of Cyprus, that we have achieved this result, especially towards the end of our Presidency, it is a big present for us. I can say, it is a Christmas present for us but it is also a Christmas present for the all of Europe, a step forward, a step in the right direction.
||SOUNDBITE (in French) Michel Barnier saying that: How many countries? As many as possible, I won't say a number and speak on behalf on the governments.