In a letter of protest to the EU’s Greek Presidency, the Economic and Monetary Affairs Committee (ECON) Members of the European Parliament from the EPP, S&D, ALDE and GUE/NGL challenged the agreement reached on late December by EU finance ministers that would establish a common €55 billion single resolution fund to rescue ailing banks.
As mentionned by Sven Giegold, Green MEP and member of the EP’s ECON Committee, lawmakers believe that “the design of the banking union by the Council is a great drawback for democracy in Europe”.
They argue that the EP's exclusion from negotiations on part of the legislation dealing with the resolution of banks at member state level violates EU law since an adequate participation of the European Parliament should be ensured. According to a draft legal study by Rene Repasi - ordered by Sven Giegold - the European Parliament is not obliged under the ordinary legislative procedure to accept any exclusion of any element of the legislation to be negotiated and will therefore ensure “its prerogatives as co-legislator are fully exercised”.
Since the reforms were initiated by the European Commission, MEP’s consider that the ordinary legislative procedure cannot be circumvented by the member states and the intergovernmental agreement is legally unnecessary. MEP’s also point to the urge to simplify the resolution decision-making process as it can be highly complex in some cases. They want a more centralized authority in order to avoid “serious impediments to the speed and efficient functioning of the implementation of the decisions”.
The resolution fund is to be designed in such a way that, as long as the fund is not in place, national budgets will have to cover their banks for another ten years, which raises big concerns amongst the signatories of this letter. In fact, the resolution fund will gradually merge national resolution funds into a common European one over a decade.
Please read here MEP's letter to the Greek Presidency.