Euro financial union must include all 27 EU states, says Barnier

12 July 2012 | By Gary Jackson

Plans to bring the eurozone’s banking system under a single supervisory regime should cover all 27 members of the EU, Europe’s internal market and services commissioner has argued.

On June 29, the summit of EU leaders decided that the incoming European Stability Mechanism will be granted the power to directly recapitalise banks and buy government bonds but only after a banking supervisory system was established for the eurozone.

Speaking at the Peterson Institute for International Economics in Washington DC, Michel Barnier said: “Of course, no non-eurozone country can be forced to participate. But my personal view is that we must do all we can to build a banking union for all 27.”

He added that the inclusion of the full EU in the banking union will help to preserve the region’s single market and avoid fragmentation by ensuring a single rule book applies to the whole continent.

“If we want one single European resolution system for failing banks, if national deposits insurance schemes are to be pooled, if the European Stability Mechanism is allowed to recapitalise banks directly, then we need pan-European supervision with real teeth,” Barnier says.

The legislative proposal on Europe’s single supervisory mechanism will be presented in September, the commissioner added.

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