BRUSSELS (MNI) – German Chancellor Angela Merkel has given her
support for a common European approach to recapitalising the EU’s
banking sector and said she would be prepared to discuss the issue at
the EU leaders’ summit later this month.
Addressing the press on a visit to Brussels Wednesday, the leader
of the EU’s largest economy said that “Germany is prepared to move to
recapitalize its banks,” but “we need criteria”.
Leaders are “under the pressure of time” and “need to take
decisions quickly,” she said.
Merkel said she was “prepared to discuss this at the summit if
necessary.”
Problems at Belgian-French banking group Dexia have persuaded EU
officials in recent days to change their tune on the need to
recapitalize the banking sector. After rejecting calls from the IMF and
OECD to increase the capital buffers of European banks, policymakers
have now come around to the idea as a way to boost confidence. The
European Commission on Wednesday also called for “common European
approach” to bank recapitalization.
EU finance ministers discussed the idea over breakfast yesterday at
a meeting in Luxembourg that was also attended by national regulators
and the European Banking Authority. But the concept at this stage is
more like a plan to have a plan, rather than an actual plan. Even the
most basic details have not yet been settled, such as what needs to be
coordinated or who should coordinate, EU officials say.
Asked about Greece, Germany’s chancellor said the country “must
remain part of the euro area and…must be given the opportunity to
improve its situation.”
However, Germany’s position on whether or not the next tranche of
aid for Athens should be approved will be based on the recommendation of
inspectors from the European Commission, IMF and European Central Banks,
she said.
Merkel also supported possible changes to the EU’s treaty in order
to enhance economic governance, saying such negotiations “should not be
a taboo.”
“We have to adapt our legislation to the factual situation,” Merkel
said.
“If we reach the conviction that a country isn’t doing all it
should as a member of the euro area I don’t think we should rule out the
possibility of treaty change,” she said.
The chancellor also supported a proposal from the European
Commission to tax financial transactions, saying that Germany would push
for global taxes of this kind at the next G20 summit in November.
She also took a hardline on financial regulation. “Every player and
every product and every financial market needs to be regulated,” she
declared.
–Brussels Newsroom, +324=952-28374; pkoh@marketnews.com
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