Reinfeldt, Merkel: ‘don’t rush EU bank oversight’

Reinfeldt, Merkel: 'don't rush EU bank oversight'
The leaders of Germany and Sweden said Tuesday they agreed that the European Union should not rush into a new system to police the banking sector, calling for effectiveness over haste.

German Chancellor Angela Merkel hosted Swedish Prime Minister Frederik Reinfeldt for talks on this week’s EU summit before heading to a World Cup qualifier match between their football teams at Berlin’s Olympic Stadium.

They said a blueprint for a European banking supervisory system to help battle the eurozone crisis was not ready to be approved by EU leaders.

“Quality comes before speed,” Merkel told reporters ahead of their closed-doors meeting.

“That does not mean that we don’t want to work quickly but we must ensure that at the end of the day the new banking supervision system is better than the one we now have.”

Reinfeldt said Sweden also found the current proposals to be flawed.

“We understand why it’s needed but we don’t think the suggestion on the table now is ready,” he said.

“And it’s better to get it right than rush it through.”

He said Sweden, as a non-eurozone country that nevertheless joined the fiscal pact enforcing greater budgetary rigour, was concerned about who would pay to recapitalize stricken banks and wanted higher capital requirements for financial institutions.

And he said all countries participating in the banking supervision system must be ensured of influence over how it operates.

Merkel said she was sensitive to the concerns of non-euro countries as the European Union tries to moves toward deeper integration to buck the crisis.

“We belong together in Europe and do not want to take any measures that shut out individual countries from the start,” she said.

“It should be an open process. We need closer fiscal and economic coordination in Europe and we will speak about these details tonight.”

France and Spain had called last week for moves toward a banking union to be agreed by the end of the year, a timetable that Germany finds unrealistic.

Merkel and British Prime Minister David Cameron also concluded after telephone talks Monday “more work was needed” to reach a deal.

AFP/The Local

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