SRM- Mexican standoff Euro-style

The Conference of Presidents Group have held intensive talks with their EP negotiators on the state of SRM play. The result is firmly-worded missive sent today from their own current President, Martin Schulz, to Commission President Manuel Barroso, summary translations in bold italic:

 “If the negotiations do not move forward in a constructive manner, the EP reserves its right to put forward for adoption in plenary its first-reading position on the basis of the ECON Committee report”. – we need to get on with this…

The “current state of play in the negotiations is not promising, given the wide differences between the Council and Parliament, meaning that no deal before the European elections in May is a distinct possibility”- our mind is made up and talks are going nowhere…

“The Conference of Presidents and the negotiating team firmly reject the Intergovernmental Agreement approach on the SRM in the Council given that it undermines the Community Method and the Ordinary Legislative Procedure”.-  and we won’t be happy if you try and sidestep us and won’t vote to enable you to do so.

As usual, the argument revolves around money, specifically- who is to pay for and who controls the resolution fund. The ECOFIN compromise lays the cost of bank resolution on the nation where the failing bank is based, while the decision to trigger the resolution is in the hands of the Franco-German-dominated Council. It is this idea of combination of centralised power, but distributed costs that is at the centre of the Parliament’s objections. Conversely, Berlin and Paris do not want to write a blank cheque to “periphery” banks without control of the process. Despite the previous intransigence of German Finance Minister Wolfgang Schauble, the prospect of a new influx of Eurosceptic MEP’s following May’s election may yet force the Council to back down, perhaps preferring to make agreement with the devil they know.

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