Finance ministers raise objections to banking supervision plan ...

Criticism over ECB's role, scope and plan to force through deal before the end of the year.

The European Commission's plan for a pan-eurozone banking supervisory system to be in place?by the end of the year is in disarray just days after it was proposed, with several finance ministers raising objections during?a meeting in Nicosia today.

Wolfgang Sch?uble, the finance minister of Germany, went as far as to say that he had concerns about the plan to give the governing council of the European Central Bank ultimate authority over the supervision of eurozone banks.

?I have considerable doubt about the proposal of the Commission that the governing council of the ECB should have the final decision,? he said after the meeting.

Sch?uble said that the ECB should be ?strongly involved? in the supervisory system but added that it would be dangerous if it affected its monetary policy independence.

Germany was not the only country to raise concerns during the two-day meeting. It was joined by other European Union member states, notably Denmark and Sweden, in raising?concerns that the Commission is demanding too much too quickly by pushing for a deal by the end of the year.

These are not Germany's only concerns. It also does not want the supervisor to be able to oversee all 6,000 banks in the eurozone but only those that are systemically important. It is understood that the Netherlands, Austria and Malta share these concerns.

Anders Borg, Sweden's finance minister, was one of the proposal's loudest
critics at the meeting. Sweden is worried that the way votes will be cast on the ECB supervisory board would leave non-eurozone countries that wanted to sign up completely out-voted. Borg said this meant that the Commission's plans were ?very problematic?.

Michel Barnier, the European commissioner for the internal market, acknowledged that there were ?legal complications? over voting rights and said that Commission officials were ?working on improving voting procedures of those not in the eurozone but wanting to be covered? by the supervisory system.

The UK has said that it will not sign up to the supervisory system but that it supported?the idea?for eurozone countries as long as safeguards were put in place to protect the single market.

Officials working for EU member states led by Cyprus, which holds the rotating presidency of the Council of Ministers, will hold their first meeting to try to thrash out a compromise in Brussels on 27-28 September.

The 27 member states of the EU must approve the proposals unanimously before they can become law.

? 2012 European Voice. All rights reserved.

Source: http://www.europeanvoice.com/article/2012/september/finance-ministers-raise-objections-to-banking-supervisor-plan/75151.aspx

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