Today’s EU summit is getting under way but Brussels’ blogger Joshua Chaffin and Peter Spiegel discuss how most of the big deals have been cut on the sidelines of the big event.
EU leaders have been arriving at the summit. In a little Brussels Blog attempt at innovation, James Fontanella-Khan and Peter Spiegel did a two-way Twitter chat on the goings on:
After two sets of late-night negotiations that stretched into early morning, EU finance ministers finally reached a deal Thursday on new bail-out rules for European banks. A quick primer:
Is the deal a big step towards a banking union? It is definitely progress. But this is no leap towards centralisation. The bank bailout blueprint was proposed even before a eurozone banking union was endorsed by EU leaders last year. It is more a political pre-condition for deeper financial integration. The reform frames the powers of EU national authorities in handling bank failures and applies to euro and non-euro countries.
The impetus primarily came from the global regulatory response to the Lehman Brothers collapse in 2008. These reforms are supposed to answer the “too big to fail” question, readying the defences for the next crisis and introducing powers to make creditors shoulder the costs of bank collapse, rather than taxpayers. It just turned out the reforms were shaped in the middle of a European banking crisis, rather than in the wake of the US one.