Britain and the rest of the EU should back plans for a banking union that would hand a single authority the power to wind down ailing banks without the approval of national governments, according to the president of the European Commission.
Jose Manuel Barroso urged the EU to take “a very big step” towards deeper integration to avoid a repeat of the European debt crisis.
“I think now we have conditions to go further that, frankly, we did not have before […] There is now a much clearer awareness among European member states about the need to go further in terms of integration, especially in the euro area. This is one of the lessons of the crisis,” he said.
The plans would include an EU-wide deposit guarantee scheme, which has already been proposed by European leaders including Italian prime minister Mario Monti, together with a bail-out fund paid for by levies on financial institutions.
Mr Barroso told the Financial Times that the union could be created without treaty changes. However, such a union would likely be challenged in Germany, which has insisted that such measures can only be implemented with treaty changes.
UK Prime Minister David Cameron has vowed to protect Britain from a eurozone superstate with common banking and political systems. Speaking last week in Berlin, he said that the UK would not participate in a banking union because it is not part of the euro.“I wouldn’t ask British taxpayers to stand behind the Greek or Spanish deposits. It is not our currency, so that would be inappropriate to do,” he said.
Mr Barroso said Britain would be allowed to opt out of a union. “If Britain cannot, because they are not in the euro area, go for more integration, we should find a way where this is possible to accommodate these different concerns.”
Categories: News mix