When Ireland assumed the Presidency of the Council of the European Union in January the highest priority was afforded to the completion of the Banking Union, with the aim of breaking the link between banks and sovereigns which had been unanimously agreed by European leaders on 29 June 2012. Real progress was made during the Irish Presidency in setting down the first real steps to a European Banking union with the agreement on the creation of a Single Supervisory Mechanism (SSM) - a very significant step forward towards ensuring financial stability and thus facilitating growth.
We have also achieved agreement on the Capital Requirements Directive IV, (CRDIV) which aims to strengthen the capital requirements for banks and the overall effectiveness of regulation for the sector and enhance financial stability.
On 26 June 2013 EU finance Ministers agreed a common position on the proposal for a harmonized bank recovery and resolution regime. This agreement will now allow negotiations to start with the European Parliament on the file and also on the related Deposit Guarantee Scheme Directive. Furthermore, the Eurogroup has agreed on the main features of the operational framework for direct bank recapitalisation by the European Stability Mechanism (ESM).
These achievements represent significant milestones towards Banking Union. The June 2013 European Council meeting concluded that the completion of the Banking Union is key to ensuring financial stability, reducing financial fragmentation and restoring normal lending to the economy.
To complete the Banking Union, the Commission will bring forward a proposal in the summer for a Single Resolution Mechanism (SRM) for banks covered by the SSM. We look forward to further progress under the incoming Lithuanian Presidency to reach agreement in the Council by the end of the year so that all elements of the banking union can be agreed by the end of the current parliamentary term of the European Parliament, as called for by the European Council.