Sweden 'can live with' EU bank deal: Borg
The Local · 27 Jun 2013, 08:40
Published: 27 Jun 2013 08:40 GMT+02:00
"As a balanced compromise we can live with this," Borg said after the marathon meeting of EU finance ministers.
Borg expressed hope however of some adjustment to the deal in forthcoming negotiations with the European Parliament.
"I think that there is further work in trialogue that can move this forward, especially when it comes to using direct recapitalization by shareholders in the banks. There are further opportunities for improvement," he said.
"But this is a significant step forward, and that means that in practice we have a solution for Swedish banks," he added.
The deal basically reaffirms the so-called "bail-in" rule - meaning that banks are primarily saved by using their own resources, shareholders or even depositors.
"This establishes bail-in as the new rule. The goal is to have a common view on the matter throughout Europe so that our taxpayers will no longer have to shoulder the burden," said Irish Finance Minister Michael Noonan according to AFP.
Although it is primarily shareholders and financiers who will be tapped for money, depositors with more than €100,000 also carry a risk of having to contribute.
"Swedish companies may very well become involved in paying for crisis-hit banks in ways that have not previously been the case. It will put more pressure on banks to act prudently. Both shareholders and their financiers will have to bear some of the risk," Borg said.
States will however retain the possibility to intervene and save troubled banks.
"The Swedish government will go in when it comes to Swedish banks. Then Swedish taxpayers have an interest to act, if it creates serious risk of a long economic decline and high costs in terms of unemployment," Borg said.