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EUROPEAN UNIONS FINANCE Union finance ministers failed early today to reach an agreement on how to close down failing banks before they can do too much damage to the wider economy.
This resolution mechanism would have marked another important step toward a ‘banking union,’ the new overall EU regulatory framework meant to restore the banking sector to health and so prevent any repeat of the bloc’s debt crisis.
“We ran out of time … it is a very complex issue,” said Irish Finance Minister Michael Noonan, who chaired the meeting.
“We made significant progress and differences were narrowed … but core issues were still to be resolved,” Noonan added after marathon talks which broke up in the small hours of Saturday.
The 27 EU ministers will meet again Wednesday to try and finalise an accord before an EU leaders summit on Thursday and Friday, he added.
After 18 hours of talks, the main sticking points were over how much the home country and creditors would have to contribute to the cost of winding up a problem bank.
Noonan said some non-euro states naturally wanted more flexibility because they did not have access to rescue funding from the European Stability Mechanism, the eurozone’s backstop.
At the same time, some eurozone states also wanted more leeway, among them France while Germany favoured a much tighter regime, EU sources said.
France and Britain argue that rather than simply making all creditors pay their share, they should have discretion over who to include.
A large company that is ‘bailed-in’ because of its exposure to a failed bank might be weakened as a result and this could have a harmful knock-on effect on the economy.
Initially, the “talks introduced more flexibility but as they went on, that went too far for some,” one EU source said as the talks broke up.
Hopes had been high that ministers would reach a deal to compliment a eurozone accord Thursday on how the ESM could inject funds into banks needing fresh capital but without adding to the already huge debt burden of member states.
The two instruments were combined in the Banking Recovery and Resolution Directive (BRRD) that ministers discussed.
Asked if the failure Saturday to agree the resolution instrument invalidated Thursday’s accord, Noonan stressed that it did not.
Up to now, the taxpayer has paid for most of the state and bank bailouts – a massive sum put at €4.5 trillion for the 2008-11 period which has stoked growing popular disquiet and added to debt levels.
To address this problem, the EU, the European Central Bank and the International Monetary Fund in March agreed a Cyprus rescue which ‘bailed-in’ larger depositors in its two biggest banks to pay for their restructuring.
The EU initially set up the €500 billion ESM to bail out member states. But last June, when Spain’s banks looked near to collapse, Brussels extended its scope to allow direct aid for struggling lenders.
- AFP 2013
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Dare I suggest that maybe banks should pay for bank bailouts !!!
the reason they cant agree is fg want the people to pay
How about we stop the bailouts and let them crash. Other banka will pop up. Bailouts are no good
Jim
A correction if you don’t mind.
The reason they cant agree is fg want the people’s grandchildren to pay
@Dmc agreed 100%, the act of bailing out the banks, and then forcing the people to pay for the bailout, results in people being unable to pay their own personal debt, which in turn leads to more stress on the banks in question, then more charges and taxes etc on the people. It’s a vicious circle.
Bailouts are the most effective way to transfer vast amounts from taxpayers to the 1% .Politicians are just the pimps in this process .
Politicians and senior civil servants are protecting their munificent pensions and sacrificing the people for that purpose. Pimps is a good description. I can think of worse.
yeah, in punts, escudos, lira, drachma, and pesetas!
5 currencies you wouldn’t wipe yer arse with, but the euro (der ubermark) still wobbles on.
Sickens me to say it, but we should get out of the Euro and apply to peg against Sterling again.
Thanks Bertie.
you’d better hope i’m not diagnosed with something terminal any time soon.
Its probably best they make ireland pay for it all….for every country, sure why not like
They wont have to make us, our eejits will volunteer
They WILL rob more bank accounts.
“Legacy losses will be used as a disciplinary device: Greece, Spain and Ireland will now have to tussle, beg and plead for debt relief regarding the funds already borrowed from the EFSF-ESM for their banks,” said Dr Varoufakis.
We are in the EUSSR like it or not.
PS “The deal reached by EMU finance ministers on the use of the bail-out fund (ESM) to recapitalise distressed banks makes clear who will in fact suffer the real losses: first shareholders, then bondholders and then deposit holders above €100,000. They stand to lose almost everything, as we saw with Laiki in Cyprus.”
From the Daily Telegraph
In AIBs case .. share holders already done … bond holders mostly paid so straight to 3rd level. Deposits will have to be hit well below 100k. Also state will need to invest an amount prior to ESM.
AIB returning to profit if they disregard the boom era loans .. wow if I disregard them from my budget it looks much better too. Also disregards the pension they need to fund since their disastrous approach to retirement for 50 year old. I dont believe a word they say.
Popped into local PO today … I intend to do so much more
The government are incapable … the people are not
The gov owns the post office!!!! LOOK OUT!!!
Ask a five year old kid. The banks ultimately should. All bailout costs should be recoverable from them in the long term. They shouldn’t get a get out of jail free card!
has A.I.B repaid any of the taxpayer,s money it received in the 1st bailout over 30yr ago,
i dont believe it has.
also if banks can chase mortgage holders in arrears why can’t we the taxpayer chase them down for the money they owe us.
Good point jim.
Seeing as those bastards have saddled each and every one of us with about €36,000 of their debt I think I’ll stop payin me mortgage for the next 4 years.
See how that goes down with them!!
Or maybe i should just follow the government’s lead, and get your grandchildren to pay instead?
Unlike those miserable f##kers i wouldn’t sleep easy if i did that.
and the reason you wouldnt be able to sleep at night is because you my friend (Eamonn O, Riain) have a conscience and a moral standard which these conmen bankers and i will include politicians because the same politicians are nothing more than chief enablers for the bankers in this do not.
they have passed motion after motion in our so-called parliament (reichstag kildare st) to facilitate the bankers utter incompetence and a reward for all this incompetence they get fat salaries even fatter pensions, membership of gyms, country clubs and of course the all important golf clubs,
now what about all these so-call developers getting paid anywhere in the region of up to €250K per year to clear off their debt to us yes folk they get paid it has to be a sick sick mind that thought that 1 up because if you or i cannot pay any loan given to us by a bank the small print says your home is at risk if you fail to pay it back ,
i dont see many of these developers being kicked out of their home,s do you ??
Yep, one happy Union where all are treated equally.
You can bet that in 10 years’ time, if we get there, the 4.5 trillion debt loaded on to taxpayers will be double that.
At the very least.
All it needs now is for someone to shout ‘TIMBER’.
What do they mean they can’t agree? It’s the same people who pay everytime a politician magnificently f**ks up…..us!
Declan
Yesterday Noonan said he has failed the Irish people in getting back their money from the Irish Banks. Today he fails to do the same for European citizens.
This man and his Government are nothing short of failures.
It’s a financial black hole just like anglo ,the ordinary joe knows nothing about anglo yet it managed to suck millions and millions of taxpayers’ money and us none the wiser.
culm might i add criminals to the topic ,our political and judicial system is smashed beyond repair.
This government spin everything to try and save face on everything .
Politics in this country has failed.
That’s simple, the bankers that are swanning around Scott free.
I thought Angela Merkel had already decided that the taxpayers would foot the bill! What a circus.
So, the egomaniac that came up with the ‘euro’. Was it a ‘Eureka’ moment? It clearly was not akin to the constipated mathematician.
Take your time guys, no rush.
Whatever is done will only be done at the behest of Commandant Merkel. What the German’s didn’t do with tanks, they are now doing with banks.
A bit unfair to say that. But with the evidence so far it’s not untrue.
Wow! Cant make up their mind since 2008…..
Wan##ng bankers
Sweet mother of science, these gangster are taking the piss,
Taxpayers paid 4.5TRILLION and it still ain,t sorted , ……sorry i,m confused combine how much was paid to all the bankers in question between 2008 and 2011, in the billions i reckon .
Time ro just let them fail , sack and jail all those involved , hit the reset button and start again.
With that 4.5 trillion wr could have relieved the world of poverty and starvation
Who does it benefit with no deal?
Bankers
Its like throwing money into a bottomless pit. They will never solve the problem it has gone to far. Why should the tax payer have to pay for the mistakes of some. The banks are partly responsible for the current situation so they should carry some of the Burden.MIS MANAGEMENT IN THE BANKS HAVE CAUSED THIS AND THOSE RESPONSIBLE HOLD BE BROUGHT TO ACCOUNT
jeez mick noonan the poor will pay you silly billies .Done deal spit on me hand
We must continue to sacrifice more to the great god banks, makers of our world. We must avert their wrath. We must not question the policy of protecting the banks. Never challenge orthodoxy. Accept without question the need for the banks.
Good news maybe if they cannot agree it means we (Ireland) may not be due another bail out soon.
Bono has offered to pay. He likes banks, especially but not only off shore banks.
A friend who lost job recently and who may come under pressure from his bank asked me how many bankers have paid the ultimate sacrifice and took their life? I could recall just one. How many people on the other side of banks mismanagement? I had no idea. More than one though. Just another angle …
Germany forced the Fianna Fáil led Irish Government to rescue the German Banks Bondholders in Irish Banks.
Such Bondholders are/were unsecured creditors!
The innocent Irish Taxpayers are now paying the price of “reckless trading” by greedy Irish Bankers , developers and Bankers !
This is NOT justice!
Meanwhile NAMA is paying many greedy developers and builders significant salaries !
Is this justice?
have your say