Banking Union: PES family makes sure that taxpayers will no longer have to pay for rescuing banks.
After a series of negotiations Europe is now equipped with a set of concrete rules and procedures that should be followed when a bank is in trouble. The creation of a Single Resolution Mechanism with a Single Resolution Fund is of historical significance, it reinforces the foundations of the European Union. This breakthrough agreement adds more safeguards on citizens’ money and promotes the sustainability of public finances. From now on it will be the responsibility of the banking sector to pay the bill and not of the taxpayers.
Our political family has been at the forefront of the negotiations since the start and argued that a good deal would entail creating a set of rules that would prioritize citizens’ needs. On March 20th the European Parliament negotiators headed by S&D MEP Elisa Ferreira and European Council negotiators headed by Eurogroup President Jeroen Dijsselbloem struck the deal on the creation of the Single Resolution Mechanism. Today the European Parliament plenary has sealed the deal by voting in favour of the resolution on the Single Resolution Mechanism.
Chairwoman of the PES Finance Ministers’ network, Deputy Prime Minister and Finance Minister of Finland Jutta Urpilainen stated: ‘Europe has taken an important step forward in creating a fairer financial sector. Our political family wanted to create an efficient Single Resolution Mechanism with solid bail-in and resolution tools.We have succeeded in this target. We have not only created a better regulated financial system with clear rules to apply in case of banking crisis, but also reversed the rules of the game: the cost of failing banks is paid by banks, their owners and creditors, and not by European taxpayers. I personally would like to thank all PES ECOFIN Ministers and the S&D Group for our regular coordination, it has been a pleasure to see that united we have succeeded.’
President of the S&D Group in the European Parliament Hannes Swoboda stated: ‘I am delighted with the success of the negotiations and with the way that our family has worked together to achieve this agreement. Thanks to the hard work of our political family, taxpayers will no longer have to bail out banks. Now it is the financial sector that has to cover the cost of failing banks. At last, we have put an end to the scandal of taxpayers subsidising bankers. The agreement also ensures that decisions on using the Fund and the appropriate resolution strategy will not be the outcome of a back room deal.’
The Single Resolution Mechanism will enter into force on 1 January 2015, while the resolution functions will apply from 1 January 2016.