Germany and France have set out sharply different visions of a new banking supervisor for Europe that they hope would better deal with future financial crises, complicating talks between the 27 European Union nations.
The EU finance ministers hope to agree already on Tuesday on the set-up of the new supervisory body, which will be headed by the European Central Bank and will hold wide-ranging authority over banks.
But Germany and France, the continent’s two largest economic powers, disagree on how many banks the ECB should be allowed to oversee, when it should start, and what its final powers should be.
German finance minister Wolfgang Schaeuble said “it would be very difficult to get approval by the German parliament if (the deal) would leave the supervision for all the German banks to European banking supervision.” “Nobody believes that it would work,” he said.
Germany has hundreds of local banks which operate differently from large multinationals like Deutsche Bank.
In contrast, France’s finance minister Pierre Moscovici came out strongly for an agreement “that covers all banks, and that is under the final control of the ECB.” He advocates supervision of all 6,000 institutions that have a banking license in the EU.
Closer banking and monetary cooperation will be a key topic at next week’s summit meeting of EU government leaders.
Meanwhile, Spain’s labour ministry said on Tuesday that unemployment rose a monthly 74,296 in November, or 1.5%, to a record 4.9 million.
The country’s unemployment rate is released separately and quarterly. It stood at 25% at the end of the third quarter, with youth unemployment rate well above 50%.