BERLIN – The European Central Bank and Germany, the bloc’s biggest economy, are at odds over how to set up the banking union that is meant to stabilize the 17-nation eurozone’s financial system.
ECB executive board member Yves Mersch said Monday in Luxembourg that in addition to establishing the agreed joint banking supervisor, the project also requires a centralized authority to unwind failing banks. He insists “one cannot live without the other.”
But German Finance Minister Wolfgang Schaeuble told French newspaper Les Echos that the establishment of such an authority to unwind banks isn’t possible without changing the European Union’s treaties, which is a complicated and lengthy process.
Schaeuble said European nations should forge better co-operation of their respective bank authorities as a “second-best solution.”