E.U. Seeks Agreement on Bank Bailout Mechanism

By Sam Obenhaus

European finance ministers are meeting this week in an attempt to resolve long-running differences over the establishment of the European Union’s bank bailout mechanism.  The heart of the debate revolves around the design of the Single Resolution Mechanism (SRM) for handling failing European banks and ensuring that they are efficiently wound-down with minimal taxpayer assistance.

The finance ministers will be working towards their second agreement on the subject.  The E.U. Parliament criticized the finance ministers’ previous SRM agreement as being too unwieldy to implement.  Both the national governments and the E.U. Parliament must approve the SRM’s design before it can come into effect.

The familiar north-south dynamic present in most E.U. financial debates is an additional point of intrigue.  Greece currently holds the E.U. presidency while Germany remains extremely skeptical of any plan to pool bailout resources.

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