EU ministers reach deal on bank risk reform
EU finance ministers agreed a long-delayed deal to toughen credit requirements for banks in Europe, in what is seen as a key condition by Germany to further integrate the eurozone.
At talks in Brussels, ministers from the EU's 28 member states agreed the reform that is intended to strengthen banks in the case of a new crisis and spare the burden of bailouts from taxpayers.
The banking package will ensure that "in future crises, banks, shareholders and creditors will be liable, not taxpayers," German Finance Minister Olaf Scholz told reporters.
French Finance Minister Bruno Le Maire hailed an "important political step paving the way for the deepening of monetary union."
Under the accord, European banks will have to abide by new limits on lending and ensure they have adequate funding in case of failure.
Greece and Italy -- where a right-wing populist government is expected to take power -- abstained. Both countries have suffered punishing bank failures linked to the eurozone debt crisis.
They argued that the deal on capital rules should be matched by an agreement on sharing banking risk in Europe, which is resisted by Germany and is not expected until a June leaders summit.
In order for the new rules to come into force, an agreement with the European Parliament is still necessary.
Under the impetus of French President Emmanuel Macron, EU leaders have pledged to table a set of reforms to the eurozone at the summit next month.
Those plans will establish new ways for eurozone countries to share economic risks, with hopes to tighten plans for a European-wide deposit-insurance scheme that would be implemented over the long-term.
Before the scheme's introduction, however, Germany insists on a significant reduction in the level of bad loans in European banks, especially crisis-hit countries such as Greece, Italy and Cyprus.
Negotiators are also trying to draw up a plan for an EU rainy day fund as well as aid to help countries adopt economic reforms.
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