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EU proposes modified plan on banking safety net to bring Germany on their side

The European Commission on Wednesday offered new ways of protection for the European banks countering possible crisis after talks on harder solutions involving the 28 EU countries that lasted around two years bearing no results.

The toned down measures are developed to convince Germany, the leading economy in the union and a harsh critic of banking risks sharing between EU member-states.

Wolfgang Schauble who is leaving his office has long been pointing to that risks sharing would lead to stronger German banks supporting less well-off competitors in other countries, be it Italy, Portugal or Greece.

The next finance minister of Germany may be likewise opposed to the idea, and to get him on their side the European Commission has prepared a not so demanding plan, which decreases the risks sharing that was part of the plan from the beginning.

Among other proposals – more stringent requirements for the states whose banking sectors could be allowed to the safety nets financed by the EU.

As the Commission said, the agreement on the plan should come the next year. Last week Reuters disclosed the plan, which cancelled previous calls for complete EU-sharing of savers’ protection if a certain bank fails, shifting all the financial load largely on the country itself.

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