“Euro zone finance ministers may achieve a “breakthrough” on Wednesday in their talks in Brussels on reforming supervision of Europe’s banks, a German government official said.
Germany and France have been at loggerheads over how many banks the European Central Bank should directly supervise and some other details.
“We hope for major progress and perhaps a breakthrough (in the talks),” the German official said, speaking on condition of anonymity, adding that Finance Minister Wolfgang Schaeuble had told the German cabinet he was “optimistic” about a deal.
“We are ready to contribute to a solution on banking supervision. We have some questions but if they can be resolved by finance ministers today then Germany will not stand in the way of an agreement,” the source said.
But reaching a deal, which EU leaders want to sign off when they meet at a summit on Thursday and Friday, will require addressing the concerns of Germany, whose support is crucial,while also satisfying France and others with deep vested interests such as Britain, Sweden and the Netherlands.
“It’s not an easy one for Germany,” said one diplomat, close to the talks. “But the markets are watching us.” Another diplomat said it came down to a conflict between quality and speed: For the best banking union possible to be put in place it will take time and it may be necessary to extend agreed deadlines.”