BRUSSELS (Reuters) - European officials can no longer meet their pledge to complete the legal framework for an EU-wide banking union by the end of the year, European Central Bank policymaker Joerg Asmussen said on Wednesday.
Asmussen’s frank assessment of the state of play in Europe’s efforts to forge a banking union came a day after Germany and France clashed publicly over plans to put the ECB in charge of supervising banks.
Germany’s Wolfgang Schaeuble told a meeting of finance ministers on Tuesday he could not support a plan that would give the ECB’s Governing Council the final say on supervision.
France’s Pierre Moscovici and the ECB protested against any watering down of a plan central to Europe’s response to a five-year banking crisis and which promises to unify the way it deals with problem banks, ending a previously haphazard approach.
“The Ecofin could have gone better,” Asmussen said of the clash between the French and Germans at a meeting of European finance officials a day earlier.
“I think that we can establish the legal basis relatively quickly, but we slip automatically into next year,” he added.
Ministers will resume discussions on December 12, a day before EU leaders meet for their final summit of the year.
But Asmussen said it would not be possible to finalise the framework this year even if the ministers agree on December 12, because of the need to involve the European Parliament.
EU leaders hope that by setting up a single, powerful banking authority and later establishing a resolution fund for distressed banks, they will cut the link between indebted countries and their banking systems.
Most countries support the idea of supervision, the first pillar of a banking union, but disagree on how best to structure it, how far to go in unifying banking systems to share risks and how to accommodate both euro and non-euro countries.
Some ECB policymakers, led by Bundesbank chief Jens Weidmann, are worried the supervisory role could destabilise the ECB by conflicting with its monetary policy role. They want to nail down strict rules to separate these tasks.
Without this separation of responsibilities, the ECB could, for example, allow information from its supervisory work influence its interest-rate setting policy, which should be focused on delivering stable prices.
“I believe that we must clearly separate monetary policy tasks from supervisory tasks,” Asmussen said. “One has to have a sensible separation, of personnel and organisationally.”
Reporting by John O'Donnell; Writing by Paul Carrel; Editing by Michael Roddy