German Chancellor Angela Merkel’s challenger in next year’s general election accused her yesterday of delaying moves to create a European banking union to boost her chances of staying in office.
Peer Steinbrueck of the opposition Social Democrats told public broadcaster Deutschlandfunk that Merkel had a clear interest in postponing key changes to the EU banking system until after the vote in September or October 2013.
“You can see that the German government with her at the helm will do everything to ensure that the realisation of the banking union will be delayed at least until after the general election so you don’t run into the unpopular situation here in Germany whereby banks are suddenly being directly re-capitalised,” Steinbrueck said.
EU leaders agreed at a summit on Thursday on a calendar for setting up a banking union after a Franco-German spat held up an accord on exactly when this key crisis-fighting tool might come into force.
The “banking union”, which is to establish a single, Europe-wide regulator under the oversight of the European Central Bank, will work hand-in-hand with the new eurozone debt rescue fund, the European Stability Mechanism (ESM).
When the supervisor is in place, the ESM would then be allowed to recapitalise weak member state banks directly, avoiding adding to a country’s debt burden.
Most eurozone member states support the principle but key differences must be resolved before implementation can begin.
Steinbrueck, who served as finance minister under Merkel during her first term 2005-2009, was tapped by the Social Democrats last month to stand against her for chancellor.
He said he favoured a system in which banks would contribute to a fund to help themselves when they run into trouble, adding that the institutions that helped cause the crisis “must be made to participate far more than to date in the clean-up work”.