Sun. Dec 4th, 2022

Brussels, 3 May 2022

The Eurogroup met in inclusive format on 3 May, via videoconference, to discuss a draft work plan on the banking union. The President of the Eurogroup presented his proposal for a work plan to complete the Banking Union. Completing the banking union is a key European objective aimed at further strengthening EU’s financial sector.

At the Euro Summit in December 2020, Leaders tasked the Eurogroup with preparing, on a consensual basis, a stepwise and time-bound work plan on all outstanding elements needed to complete the Banking Union. Leaders underlined this mandate once again at their informal meeting in Versailles on 10-11 March 2022, emphasising that a completed Banking Union must be part of the equation for financing the needs of our economy.

The draft work plan has been formulated to reflect the views and the concerns that have been raised by member states in my many months of engagement with them. And I was heartened that many colleagues did recognise the importance of revisions that have been made and compromises that have been offered. There is a huge amount of work to be done, but my team and I will spare no effort between now and June to try to make this progress and to try to reach agreement.

Paschal Donohoe, President of the Eurogroup

Meeting information

  • Video conference
  • 3 May 2022
  • 16:00

Preparatory documents

Outcome documents

 

Further remarks ->


Remarks by Paschal Donohoe following the video conference of the Eurogroup of 3 May 2022

The meeting of the Eurogroup focussed exclusively on how we can make progress on Banking Union. In this meeting, I presented to my colleagues a detailed proposal for a stepwise and time-bound work plan on all of the outstanding elements to complete Banking Union. This was requested by our leaders.

The meeting went exactly as I would have expected. There was broad agreement from colleagues on the need to make progress on Banking Union. At the same time, member states set out their positions with regard to the work plan that I presented.

The plan has been formulated to reflect the views and the concerns that have been raised by member states in my many months of engagement with them. And I was heartened that many colleagues did recognise the importance of revisions that have been made and compromises that have been offered.

After many years of intense discussions, we now know each other’s viewpoints well. I made the case for compromise, I made the case for trying to move forward. Now, I am obviously and certainly not say that our differences have been settled. Banking Union remains a very complex project, both technically and politically, a project that we are continuing to try to make progress on in very challenging times. However, it is my firm belief that shared challenges can also foster a shared sense of responsibility. And I made that case in the Eurogroup meeting and I did send and receive a recognition of that point from my colleagues.

I’ve also been engaging intensively with my counterparts in the Commission, Executive Vice President Dombrovskis, Commissioner Gentiloni, and Commissioner McGuinness, also with Klaus Regling in his role as managing director of the ESM. And then, of course, engagement with President Lagarde and the ECB. All of their engagement has been very helpful in preparing the draft work plan.

So what I proposed aimed to achieve balance across four different workstreams:

  • a stronger framework for the management of failing banks within the European Union,
  • more robust protection for depositors,
  • a more integrated market for banking services, and
  • increased diversification of bank sovereign bond holdings in the European Union.

There are two phases for each workstream. In the first phase, I proposed measures for immediate implementation. In the second phase – additional longer-term measures to complete the Banking Union. The direction and key features for the second phase would already be set now. We would not have an open horizon.

There is also innovation in the process that I put forward. There would be a political checkpoint between the two phases, and that checkpoint is an important moment. First, it would provide a guarantee. Member states would be able to assess whether the broader conditions are in place to move to the second phase of the reforms and to set out the way in which additional measures would be delivered based on the principles which are already included in the workplan now. But the checkpoint is also an incentive for progress on all workstreams. When phase two is implemented, I have proposed a review clause to reassess if all of the pieces work together, or more will need to be done on Banking Union overall.

So all in all, we did have a very full and very comprehensive discussion this afternoon. There was an exchange of views on really important issues. And obviously, there is a huge amount of work to be done. My team and I will spare no effort between now and June to try to make this progress and to try to reach agreement. I was heartened by the willingness of ministers to engage and to continue to engage in this detailed discussion. There was a good humour in our exchange. We have a lot to do and we will get to it.

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Press remarks by Commissioner Gentiloni at the Eurogroup press conference

3 May 2022

Good afternoon.

Ten years ago the Euro Summit of June 2012 provided the political impetus to take the first step towards the creation of our Banking Union. That political impetus came at a grave moment for the euro area, but the pressure Europe was under at that time helped drive important progress. In just a couple of years, the Single Supervisory Mechanism and Single Resolution Board had been established.

But then, as the pressure of the euro crisis eased, so it became more difficult to move forward with the other, no less important elements needed to complete the Banking Union.

And completing our Banking Union has remained a priority for the European Commission throughout this time. So we fully and strongly support the efforts of the Eurogroup President to create a new political impetus to drive this work forward.

Specifically, we support the ambition to deliver by June the work plan towards a complete, steady-state Banking Union. It would be a strong positive signal, especially in these in extraordinary uncertain times.

We welcome the progress achieved so far and we consider that the approach based around two phases across four pillars, with a political “checkpoint”, what Paschal just explained, should provide a good basis for an agreement next month.

As in any negotiation, an agreement will of course require some further compromises on all sides.

And as in any negotiation, we can get there if we all keep our eyes on the big prize. The Roman philosopher Seneca famously said that no wind is favourable for the sailor who does not know where he wants to land.

Well, our landing zone is clear: a completed Banking Union. One of the last building blocks to complete our Economic and Monetary Union. It is key to enhancing the resilience and stability of our financial sector and to ensuring that it is able to support sustainable growth, investment and employment.

Once an agreement is reached, the Commission will be ready to do its part by adopting the necessary legislative proposals.

So let me conclude by again thanking you, Paschal, for your efforts and assuring you of our strong support in the next phase of these crucial discussions.

Source – EU Commission

 

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