20 Mar 2014
EU officials strike deal on banking union, mull further sanctions on Russia
FXStreet (Łódź) - After reaching a final compromise on the Eurozone banking union after all night talks, EU officials gathered in Brussels shifted their focus to the situation in Ukraine and further sanctions to be imposed on Russia in response to its annexation of Crimea.
Banking union deal
In the European morning a draft agreement on the Single Resolution Mechanism, the key element of the EU banking union, was put forward. It includes limiting the time for gathering money for the fund from bank levies from ten to eight years and allowing the participating countries to share 40% of the fund starting from the first year, and 60% from the second year. Furthermore, the ECB will was given top responsibility for the closure of failing banks.
“The Single Resolution Mechanism might not be a perfect construction but it will allow for the timely and effective resolution of a cross-border bank in the eurozone thus meeting its principal objective,” EU commissioner Michel Barnier said after the deal was announced.
EU officials divided on Russia sanctions
Discussions on further sanctions on Russia to be imposed in response to Moscow's relentless push to incorporate Crimea despite the West's opposition, are not easy as the officials are divided on how severe they should be.
British Prime Minister David Cameron is opting for "far-reaching" sanctions, extended over more Russian officials, while German Chancellor Angela Merkel advises taking a softer approach and waiting to see whether the situation escalates further.
French president Francois Hollande urged the EU to suspend political relations with Russia completely, as the moving of borders was “unacceptable.”
Banking union deal
In the European morning a draft agreement on the Single Resolution Mechanism, the key element of the EU banking union, was put forward. It includes limiting the time for gathering money for the fund from bank levies from ten to eight years and allowing the participating countries to share 40% of the fund starting from the first year, and 60% from the second year. Furthermore, the ECB will was given top responsibility for the closure of failing banks.
“The Single Resolution Mechanism might not be a perfect construction but it will allow for the timely and effective resolution of a cross-border bank in the eurozone thus meeting its principal objective,” EU commissioner Michel Barnier said after the deal was announced.
EU officials divided on Russia sanctions
Discussions on further sanctions on Russia to be imposed in response to Moscow's relentless push to incorporate Crimea despite the West's opposition, are not easy as the officials are divided on how severe they should be.
British Prime Minister David Cameron is opting for "far-reaching" sanctions, extended over more Russian officials, while German Chancellor Angela Merkel advises taking a softer approach and waiting to see whether the situation escalates further.
French president Francois Hollande urged the EU to suspend political relations with Russia completely, as the moving of borders was “unacceptable.”