Germany Says 'Nein' To EU Bank Shutdown Plan

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In case you had any doubt as to who actually runs the European Union, it's her.

The proposal on bank resolution—the so-called "single resolution mechanism"—announced Wednesday was to form the second pillar in the euro-zone's banking union project which aims to sever the toxic link between troubled euro-zone banks and their sovereigns. The first pillar is a single supervisor for euro-zone banks, a task the European Central Bank is expected to assume in the fall of 2014….

But Germany shot down the proposal in its present form almost as it was announced.

"In our view, the commission proposal oversteps [its] authorities," Steffen Seibert, a spokesman for Germany's government, said at a news conference in Berlin. "That's why in our view it isn't something that can bring about great credibility," he said.

Germany has consistently resisted previous efforts to transfer financial risks from national economies to the broader euro zone, because it feels it would end up by paying a large part of the bill.

Germany Objects to EU Proposal for Restructuring Banks [WSJ]
Germany a Hurdle to European Unity on Banks [NYT]
EU Unveils Bank-Crisis Plan With 55 Billion-Euro Fund [Bloomberg]

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