The comments by the official, Jörg Asmussen, a member of the executive board of the central bank and a German socialist, underscored a deepening rift between European Union economic policy makers and Wolfgang Schäuble, Ms. Merkel’s finance minister, over plans for a Europewide system to restructure or shut down failing lenders.
In a news conference after a meeting of euro zone finance ministers, Mr. Asmussen suggested that he and Mr. Schäuble remained poles apart and said there was “a sound legal basis” to press ahead with the bank’s plans.
A day earlier, lawmakers at the European Parliament agreed to give the central bank supervisory authority over some of the bloc’s biggest banks.
That was part of “the biggest integration step in Europe since the introduction of the common currency,” he said. The so-called banking union still needs approval from European Union governments to take effect, though that is expected to be a formality.
Mr. Schäuble reiterated this week that decisions on closing banks should be kept at the national level.
“Resolution should generally be done by national authorities and not by the E.U. Commission,” Mr. Schäuble told the newspaper Börsen Zeitung. “It is not an appropriate central resolution authority,” the paper quoted him as saying.
Ms. Merkel is seeking a third four-year term in national elections on Sept. 22.
The idea of the banking union is to catch banking problems and to fix them, so that governments do not need to resort to bailouts that destabilize the euro and leave taxpayers holding the bill.
The next phase of the banking union, creation of an integrated system to enforce the same rules for closing or restructuring banks in the euro area, is under way.
But progress has been slowed by the reluctance of the German government to commit to a system in which some euro zone nations could become responsible for each other’s debts.
Michel Barnier, the European Union commissioner for financial services, made the proposal for the union in July. Mr. Barnier has called for a final agreement before the European Parliament takes a pause next spring ahead of elections in May. Finance ministers held their first formal discussions on the initiative here on Friday. That meeting was to continue on Saturday.
Mr. Asmussen said the rapid introduction of a single system for shutting and restructuring banks was critical for a robust European banking system.
Mr. Asmussen also highlighted a legal opinion by European Union lawyers concluding that Mr. Barnier’s proposal had “a suitable legal basis” in European Union law. “We now see a consensus among the legal experts,” Mr. Asmussen said. “This should enable us to move forward.”
Germany is not alone in expressing concern. Some other member states, including Finland, have called instead for a network of national systems.
And on Friday, ministers from Spain and Sweden raised issues about the banking union. Britain, not directly affected but able to vote on adoption of the system, has also questioned the plan.
Article source: http://www.nytimes.com/2013/09/14/business/global/rift-exposed-at-euro-zone-meeting-on-bank-system.html?partner=rss&emc=rss