The new stage that opens in the negotiation of the bank deposit guarantee fund or EDIS, as this mechanism is known by its acronym in English, it has been received with a mixture of optimism (moderate) and many doubts in the euro club. Germany lifted this week, after four years, its veto to the only one of the pillars of the future Banking Union that is still pending development. But it has done so in exchange for a series of conditions that do not fit equally for the nineteen states that share currency. Everyone agrees that the step taken by Berlin is "a breakthrough." But also, that the debates that lie ahead will not be easy.
The essence of the German plan is that this fund –it would allow any European entity to guarantee deposits of up to 100,000 euros from a saver if their bank failed– articulate as long as the incentives that banks have for acquiring sovereign debt are eliminated. In other words, that in the end the purchase of the bonds launched by the governments is limited to curb the tendency that the entities have to accumulate debt of their own parent State. They should diversify these types of purchases and avoid them becoming a drag, as happened in the last recession.
The proposal is signed by German Finance Minister Olaf Scholz and has been analyzed these days by his colleagues in Brussels. The result? A yes, but no. And, of course, what it touches "is to go step by step", as President Eurogroup, Mario Centeno, stands out. France is one of the delegations that has come closest to the German position. Bruno LeMaire, his economic minister, said Friday in the community capital that he agreed to link funds and incentives to the acquisition of public debt. "We also establish a link between the European deposit guarantee and the fight against the risk of the circle between sovereign debt and banks," he said, although with certain nuances. For what it could happen. "And in this matter, the devil is in the details," he added.
Acting Economy Minister Nadia Calviño, who met with Scholz last Thursday before the celebration of the Eurolgroup (this Friday for agenda issues could not attend the Ecofin), showed more reluctance than his French counterpart in understanding that a relationship between the Deposit Guarantee Fund and the treatment of sovereign debt should not be established because "these are issues that we consider to be unrelated."
Although it has undoubtedly been Italy, the country that I could feel this Friday most directly alluded to by the German plan (its public debt would exceed 136% this year), which has launched the most critical message. His minister, Roberto Gualtieri, warns, in fact, "of the negative impact" that would have to modify the conditions that govern at international level on the treatment of public debt.
The negotiation will definitely be turbulent, but at least there will be negotiation, something that has barely existed since 2015. The will of the euro club is set a road map in december for next year to catapult the coveted Banking Union.
. (tagsToTranslate) france (t) would accept (t) link (t) fund (t) guarantee (t) deposits (t) sovereign debt (t)