MADRID | By Jaime Santisteban | Amid the hot debate on when the banking union will be wrapped up, market makers are focusing on the main steps already taken: the ECB gets the decision-making power from the European Council and Germany tries to avoid that public money can be used in the transitional period. Link analysts don’t expect major fluctuations today, but they warn investors about some “red lights.”
MADRID | By Francisco López | Spanish banks face into the new era of banking union with their homework successfully completed, both in terms of adjustments and efficiency in the stress tests. Their balance sheets are healthy, although now a new challenge awaits: how to improve profitability in an adverse economic cycle, with rates close to 0% and with credit lending remaining worryingly low.
ATHENS | By Kostas Karkagiannis at Macropolis | In June 2012, at the height of the debt crisis in the eurozone, its leaders decided to create a banking union. Their aim was, as the conclusions of that summit stated, to: “break the vicious circle between banks and sovereigns.” In this case, the sovereigns were members of the single currency whose economies were suffering.
MADRID | By JP Marin Arrese | The agreement reached on a common backstop for ailing banks in the Eurozone comes utterly short of expectations.
MADRID | By Luis Martí | In Germany, coalitions are frequent at all levels of government, with a degree of formalization and publicity which was minimum before (in the Adenauer Era), but which has shown an extensive “coalition contract” since 1969. The current contract, initialled on 27 November, has yet to be ratified –and it’s expected that the process will be brief where the CDU and the CSU are concerned, but not so much in the case of the SPD, which must be subject to a vote of approval by its affiliates.
MADRID | By Julia Pastor | Amidst their talks about economic policies and speed railway connections between Spain and France, both Mariano Rajoy and François Hollande met in Madrid on Wednesday. However, the visit bottomline is to seek for a common stance on banking supervision.
LONDON | By BARCLAYS | EU Finance Ministers adopted the regulations that pave the way for a single bank supervision in the euro area. As we had expected, however, they failed to make significant progress on a single resolution mechanism. As long as the banking union remains incomplete, the link between banks and sovereigns will not be fully broken and financial fragmentation will continue to prevail.
NEW YORK| By Ana Fuentes | Don’t fall asleep with your banking union, the IMF urged the EU on Wednesday, or you won’t be credible. The Washington-based institution also called for an agency that would close or help troubled banks from a national to European level. Everyone in Brussels seems willing to compromise… except for Germany. The elections are over, but Berlin is still sticking to its tough stance.
THE CORNER TEAM | By Zsolt Darvas and Silvia Merler via Bruegel | During the crisis the European Central Bank’s roles have been greatly extended beyond its price stability mandate. In addition to the primary objective of price stability and the secondary objective of supporting EU economic policies, we identify ten new tasks related to monetary policy and financial stability.
MADRID | By JP Marin Arrese | Angela Merkel is now more powerful as chancellor than before, and the Euro-sceptics have lost their influence over the future of Germany’s and Europe’s issues. However, despite all the good intentions, it is more than likely that Banking Union and the European integration will be relegated to a mere supervisory exercise.