Today EU finance ministers are meeting to discuss proposals to give the Eurozone more powerful tools in order to prevent financial crises. One of them, a common scheme to guarantee bank deposits that has been pushed by Brussels, the European Central Bank and southern Europe, still faces fierce resistance from Germany. However, according to diplomats, Monday’s deal is likely to kick the can down the road by handing the project, known as European Deposit Insurance Scheme (EDIS) to the senior national finance officials, that would report back in June.
Besides, the meeting is likely to see governments endorsing a system of debt restructuring that would allow the European Stability Mechanism (ESM) to mediate between creditors and governments. Ministers should also agree on plans suggested by France and Germany for government bonds to be issued with tough “collective action clauses” to prevent situations where “holdout” investors can prevent debt write-downs.
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