Courtesy of Mish.
Late last week, following a bitter feud between German Chancellor Angela Merkel and French President Francois Hollande, a compromise of sorts was reached at the latest summit.
Please consider Berlin and Paris Compromise on Bank Oversight.
European leaders have reached agreement on the roadmap to a banking oversight regime in the euro zone. Following a public back-and-forth between German Chancellor Angela Merkel and French President François Hollande, the 27 European Union heads of state and government on Thursday night found a compromise at their two-day summit in Brussels.
The agreement calls for the legal framework for financial sector oversight to be completed by the end of the year, but actual implementation won’t come until later. The oversight regime will be introduced “in the course of 2013,” the summit’s closing statement reads.
The compromise is a victory for Merkel. Both France and Spain had been emphatic that bank oversight begin on Jan. 1, 2013. Berlin, however, insisted that any such regime be thoroughly planned and resisted efforts to move quickly, receiving support from such non-euro-zone countries as Sweden and the Czech Republic. Over a dinner of roast veal and spinach, Hollande and his allies backed down.
As the week progressed, it seemed as though the conflict between Europe’s most important protagonists had escalated.
The French president in particular seemed to be on the war path. He gave a joint interview to several European dailies which included what seemed to be a direct attack on the chancellor. “Those who speak most passionately about political union are often the ones who hesitate the most when it comes to making pressing decisions,” he said. His feistiness did not abate immediately upon his arrival in Brussels. Before meetings began, he insisted that the summit would be focusing on the planned banking union and not on fiscal union, Merkel’s preferred project. He also accused Merkel of dragging her feet on bank oversight due to the approaching 2013 general elections in Germany.
Merkel didn’t shy away from confrontation either. During her speech to German parliament on Thursday prior to her departure for Brussels, she threw her support behind Finance Minister Wolfgang Schäuble’s proposal, made earlier in the week, for a super commissioner to monitor, and even veto, national budgets of euro-zone member states.
Compromise to Nowhere
Bear in mind last June the Euro leaders agreed to do this by the end of this year. Now the target, minus details, “will not come until later”. The oversight regime will be introduced “in the course of 2013.”
Is “introduced” the same as “implemented”? The more important question is “Does it even matter”.
Catch A Falling Knife
In his Weekly T-Report Peter Tchir sums up the situation nicely. …
