The EU lawmakers are about to finalize rules for a single supervisory mechanism (SSM) coordinated by the ECB. The European Commission is expected to table legislation for a resolution mechanism to wind up ailing banks within the coming months. European Central Bank (ECB) chief Mario Draghi said on Monday in the European Parliament that a euro zone banking union will need a common resolution fund, and that it has to be “fiscally neutral over the medium term.” How can another European bank bailout fund be fiscally neutral?
”The European Resolution Fund should be backed by a public backstop mechanism to ensure that it would be fiscally neutral over the medium term.”
Yup..neutral, but only over the medium term. Sooner or later the taxpayers will have to pay for this bailout, too…
Speaking with MEPs on the monetary affairs committee, Draghi said that the resolution fund should be financed via levies to safeguard against having to “recourse to taxpayer money,” the EUobserver.com reports.
Levies, hu?
Here are some related words:
- direct tax
- personal tax
- capitation
- custom(s)
- excise
- hidden tax
- income tax
- poll tax
- property tax
- sales tax
- single tax
- sin tax
- tariff
- toll
- tribute
- value-added tax
- withholding tax
- super tax
- surcharge
- surtax
- death tax
- estate tax
- inheritance tax
- flat tax
- proportional tax
Also, the European Resolution Fund “should be backed by a public backstop mechanism,” Mr. Draghi added, to ensure that it would be “fiscally neutral over the medium term.”
I’m sorry, but this sounds like pure nonsense to me.
There’s nothing new here – just another way to ensure that the bailout mechanisms already set up by the EU leaders – the European Stability Mechanism (ESM) and the European Financial Stabilisation Mechanism (EFSM) – will still be in place when the European banking union becomes a reality.
But the need for a pan-European resolution fund is widely accepted among most EU lawmakers. However, some countries fear it could lead to their taxpayers financing bank rescues in other countries.
Well, I think they’re on to something….
Meanwhile, Draghi continues to kick the can, downplaying the recent diplomatic row over the exchange rate policy of the euro, dismissing it as “excessive” talks of a currency war involving the euro zone, Japan and the US.
He also said that the ECB did not regard the euro zone exchange rate as “a policy target, but it is important for growth and price stability.”
Important, but not a target….
And, according to the bank’s economic forecasts, the euro zone economy will fall by 0.3 percent in 2013, although Draghi indicated that he expected “a gradual recovery later this year.”
Heard that one, too…..quite a few times over the last five years.
Related by econoTwist’s:
- The Big Bailout Scam (EU Version)
- Former Goldman Sachs Banker Become New ECB President
- ECB: “What We Are Doing Is Actually Illegal”
- EU: No Bail In, Just Eternal Bailouts
- The Sociopathic Banking System of Europe
- The Big Cannoli (Europe’s Catch 22)
- The Brilliance Of A Bailout
- Spain: Mobile-Phone Jammers Installed To Prevent Info Leaks At ECB-Meeting
Other related articles:
- ECB’s Mario Draghi pushes for European bank bailout fund (denverpost.com)
- Eurozone Recovery Still at Risk, ECB’s Draghi Warns (hispanicbusiness.com)
- Draghi Says EU Needs Common Fund To Handle Failing Banks – Bloomberg (bloomberg.com)
- Draghi dismisses talk of currency war, but watching euro (Reuters) (newsdaily.com)
- Mario Draghi Gets It Absolutely Right On ‘Currency Wars’ (businessinsider.com)
- Germany’s Bundesbank says Anglo promissory note debt deal ‘problematic’ (independent.ie)
- Euro exchange rate important for growth, prices: Draghi (news.yahoo.com)
- Draghi: eurozone needs bank resolution fund (euobserver.com)
- Draghi sees inflationary bubbles (europeansting.com)
Van Rompuy: Next hours are “decisive” for Greece and for Europe
JUST RELEASED: President of the European Council, presents the outcomes of the European Council to the European Parliament.
“There are decisive moments, and the next hours will be decisive. Not only for Greece, but also for the euro zone and the stability of the European economy.”
VIDEO BY THE EU COUNCIL PRESS CENTER:
1st collector for Van Rompuy: Next hours are “decisive” for Greec…
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