Taxpayers and savers must be the last people called upon to bail out banks, says Parliament's negotiating position, approved by the Economic and Monetary Affairs Committee on Monday, on draft rules on saving struggling banks. The text rules out using deposits below €100,000 and says that even deposits above €100,000 should be the last to be called in. The committee voted against using deposit guarantee funds for resolution actions and also set out strict conditions for using taxpayer's money.
The confusion and delay that surrounded decisions on the Cyprus assistance plan were not only due to Cypriot intransigence. Rather, they reveal a need to radically rethink Eurogroup and Troika working methods, argued Economic and Monetary Affairs Committee MEPs in Wednesday's debate with Commissioner Olli Rehn and ECB Executive Board member Jorg Asmussen.
Pressure to reveal how the Cyprus financial plans were hatched would continue, the chair of Parliament's economic and monetary affairs committee, said on Tuesday when she closed a debate with Eurogroup President Jeroen Dijsselbloem that left various MEPs less than fully satisfied on the quality of the answers provided.
The European Commission's austerity focus was widely lambasted by centre-left MEPs at an Economic and Monetary Affairs Committee meeting with Commissioner Olli Rehn on Thursday, only a week after he last came in for strong criticism in Parliament's plenary chamber. But the centre right's lead MEP urged Mr Rehn to show more bravery and conviction amid growing signs that the Commission may to bow to anti-austerity campaigners.
MEPs quizzed European Central Bank Vice-President Vitor Constancio on what more can be done to help credit flow to businesses and households, whether austerity is the right recipe, ECB transparency and possible interest rate cuts at Wednesday's Economic and Monetary Affairs Committee meeting on ECB activities in 2012.
Property buyers would be better informed about the costs and consequences of taking on a mortgage, better protected from market swings while the contract lasts and better protected if they cannot repay the loan, under a provisional deal struck by Economic and Monetary Affairs Committee MEPs and EU member state representatives on Monday. To become law, this deal must be approved by Parliament as a whole and endorsed by the member states.
MEP Sharon Bowles, Chair of the European Parliament's economic and monetary affairs committee welcomes the agreement on Cyprus, particularly the recognition that banks can fail and that the deposit guarantee principle must be upheld.
Investment fund managers' bonuses must be capped, their salaries must be linked to their funds' performance said Economic and Monetary Affairs Committee MEPs in a draft law voted on Thursday. Individual investors' money must also be better protected, they added.
Eurogroup chief Jeroen Dijsselbloem took responsibility for the rejected Cypriot bailout plan, adding that it was a "joint decision" in the Economic and Monetary Affairs Committee on Thursday. He also told MEPs he doubted that there really was a possible 'Plan B'. MEPs were severely critical of the way in which events had panned out over the weekend, with most insisting that that it was preposterous to tax small savers and that mistakes had been made on all fronts.
Banking needs a culture change, which piecemeal legislation will not achieve on its own, says a draft report presented in the Economic and Monetary Affairs Committee on Wednesday. It advocates further, more radical reforms, including separating retail from investment banking, stimulating competition, improving corporate governance and crisis management, reducing complexity and curbing risk-inducing pay deals. The Commission is asked to table legislation to this end.