BRUSSELS (Reuters) - A few hours before the opening of a European Council, the finance ministers of the European Union reached an agreement overnight from Wednesday to Thursday on the question of loss sharing in the event of bank failures.
The French Minister of Finance, Pierre Moscovici, indicated for his part that the ministers had also acceded to a request from France, namely that the ESM (European Stability Mechanism) could be used to come to the aid of banks in difficulty. in the euro area.
This, he said, gives the system solidity and creates a mechanism of solidarity.
"We have an agreement," said a European official present at the talks, which began Wednesday evening in Brussels and lasted seven hours.
The agreement, which will come into force by 2018, includes a new rule under which EU countries will be able to impose losses on bondholders and depositors whose accounts exceed 100.000 euros, in the event that a bank would be in trouble.
This agreement will alleviate, in the event of new banking difficulties, the burden that taxpayers have borne since the beginning of the international financial crisis, the bailouts having been made possible by the injection of public money.
"For the first time, we have agreed on an important 'bail-in' to protect taxpayers," noted Dutch Finance Minister Jeroen Dijsselbloem.
BANKING UNION
These new rules break a taboo in Europe, although countries will have some flexibility to decide when and how to impose losses on creditors of a troubled bank.
The imposition of losses on large depositors was already tested in March as part of the international aid package granted to Cyprus and represents a significant change in European policy on banks in difficulty.
The Twenty-seven had already tried last Saturday to agree on rules imposing losses on the wealthiest customers, but they had then failed after twenty hours of discussion, mainly because of disagreements between Germany and France.
The European banking union project is to be discussed this Thursday and Friday in Brussels at the summit of the Heads of State and Government of the Twenty-Seven.
The EU spent the equivalent of a third of its annual gross domestic product (GDP) to help its banks from 2008 to 2011, without resolving to close certain establishments, as the United States did after the financial crisis of 2008-2009.
"Europe has not covered itself with glory," said Karl Whelan, an economist at University College Dublin. "The United States recognized the extent of the problems of the banks more quickly. But in Europe, we hid that under the carpet," he added.
Robin Emmott; Hélène Duvigneau, Julien Dury and Eric Faye for the French department
By Robin Emmott and John O'Donnell
source: uk.reuters.com
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