Courtesy of Mish.
France has encouraged Spain to apply for aid as soon as possible. In Germany, Wolfgang Schäuble wants anything but a timely application.
Note that unless a country requests a bailout, and agrees to terms set by the IMF (something Spain does not want to do), the entire OMT plan of Draghi is useless.
On September 12, José Manuel Barroso, European Commission president unveiled his European banking union proposal with a goal of having it approved by December.
All 27 EU member states have a veto on Barroso’s plan, not just the eurozone countries.
Numerous EU Ministers At Odds Over Banking Union
The odds of approval by December are zero percent given battles between eurozone and non-eurozone countries erupted over the banking union erupted in Cyprus at an EU meeting on Saturday.
Germany, Sweden, Poland and the Netherlands called for a more “realistic” negotiating timetable to resolve the problems, suggesting talks will run into 2013. Anders Borg, Sweden’s finance minister, said it was “undecidable and not acceptable” to aim for a deal by the end of the year.
Germany is in favour of the ECB having some responsibility for monitoring big financial institutions, but is resisting the broad scope and high degree of centralisation proposed by the European Commission.
Germany also objects to what it says is hasty implementation, with the ECB taking over supervision for all banks by 2014.
After the meeting Wolfgang Schäuble, the German finance ministers, threw out a further complication by demanding a pan-eurozone stress test for banks before supervision is passed to the ECB.
This step-by-step approach is at odds with France, which is pressing for the eurozone to move rapidly towards a centralised system for supervising all 6,000 lenders in the single currency area.
Sweden, Poland and the UK are concerned about the legal anomaly of the European Banking Authority being unable to impose binding decisions on the ECB, while it could force sovereign states to comply when it adjudicates in a dispute. The commission argues that, in the rare event of the ECB failing to comply voluntarily, banks would be bound to comply with EBA decisions.
Battle Brews Between Germany and France Over Spain