The German finance ministry is on the brink of an extraordinary achievement. Like many power shifts within the EU, it is happily hidden behind the most fiendish jargon. But if all goes to plan, Berlin is securing something rare and coveted in Brussels: the effective power to block future EU banking regulation.
Put another way, it is quietly resetting the ground rules of the single market in financial services without the need for treaty change or a referendum or a big speech. Take note David Cameron.
How has Berlin managed it? It is all concealed in the thicket of legal arguments over establishing Europe’s €55bn bank rescue fund via an intergovernmental agreement, rather than through the EU’s normal “community method”, where majority (or at least qualified majority) rules.
To translate: at German behest, the rules for pooling banking union rescue funds are laid out in a side-deal between governments, rather than under legislation agreed between EU member states and European parliament. Such intergovernmental pacts are allowed; remember the fiscal compact? But they are not supposed to change or impact the EU’s common rulebook, outlined in the EU treaties.