BERLIN (MNI) – The European Union’s Internal Market Commissioner
Michel Barnier on Thursday insisted that centralized banking supervision
should gradually begin operating by January next year, a stance that
Germany is publicly opposing.

Barnier told reporters here that he believed he could find a
“dynamic compromise” with Germany on the matter, without providing any
details of what this compromise might look like.

The commissioner insisted that the European Central Bank should
start supervising the first banks already by January 1 of next year. By
July 1, all systemically relevant banks in the Eurozone should be under
the supervision of the ECB, he said. And by Jan 1, 2014 all banks have
to be supervised by the ECB, he reaffirmed.

German Chancellor Angela Merkel said on Monday she believes it is
unlikely that a joint banking supervision system in the Eurozone will be
operable by the start of 2013. She reiterated that there cannot be any
direct bank recapitalisation from Europe’s permanent bailout fund, the
European Stability Mechanism, until a centralized bank supervisor is
fully operable.

Barnier also reaffirmed today that direct banking recapitalisation
is only possible once European banking supervision is working.

–Berlin bureau: +49-30-22 62 05 80; email:

[TOPICS: M$X$$$,MGX$$$,M$$CR$,M$G$$$,M$$EC$]