BRUSSELS (MNI) – German Finance Minister Wolfgang Schaeuble on
Monday moved to dampen expectations that troubled European banks would
be able to benefit quickly from direct capital injections from the
European Stability Mechanism.
Speaking to the European Parliament’s Economic and Monetary Affairs
Committee, Schaeuble said that the capacity of the ESM to aid banks
would be built up over time.
Comparing the speed to that of melting snow in the Alps,
Schaeuble, warned that the ESM would not immediately be in a position to
conduct direct bank recapitalisations as soon as the European Central
Bank assumes supervision of the Eurozone’s banks.
“Once it is functional, once it is up and running, it will be
possible,” said Schaeuble, adding that banks seeking aid would be
required to meet strict conditions and would be watched closely.
“Spain, of course, cannot wait that long,” he said.
Asked if countries that have yet to start using the euro should be
able to benefit from ESM direct bank recapitalisations if they submitted
their banks to ECB supervision, Schaeuble said that he could not see
how.
“My imagination is not good enough to see how they can be part of
ESM without being in the Eurozone,” said Schaeuble.
“Banking supervision doesn’t mean every bank can get aid,” he said,
adding that conditions must be attached and that it is up to governments
to apply for the aid on behalf of the banks.
In general “expectations of banking supervision are a little bit
too high,” he said.
Schaeuble said it was crucial that the ECB preserve the
independence of its monetary policy by ensuring a strict separation from
its new supervisory role.
He also reiterated his government’s readiness to consider changes
to the EU treaty to perfect the structure of Europe’s monetary union.
–Brussels Newsroom, +324-952-28374; pkoh@mni-news.com
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