The FINANCIAL — A blueprint for a European banking supervisory system to be set up to help counter the eurozone crisis is not ready for a decision by EU leaders this week, the German government spokesman said Monday.
Steffen Seibert said Germany was committed to a new European system of banking sector supervision but that it would not yet be "ready for decision" at a Brussels summit on Thursday and Friday.
"We have a big interest in it, but we also say that such banking supervision must be able to work in a credible, independent and effective way," he told a government news conference.
"We will contribute all we can towards that happening. It's certainly not yet ready for decision at the next European summit," he added.
"But the preliminary work is intensively underway," he said.
The German government is committed to setting up an independent, Europe-wide system of banking supervision, which it sees as "one of the really important lessons" to have emerged from the debt crisis, Seibert added.
Chancellor Angela Merkel has warned against rushing to create a banking union, calling for a "step-by-step" approach to ensure it works effectively rather than rushing "just so we can say 'we have something'".
Seibert reiterated that it was currently "hard to imagine" that the supervisory system would not only be decided upon but also up and running by January 2013.
EU leaders agreed in June that the bloc's rescue funds could directly recapitalise struggling banks but only when a supervisor under the leadership of the European Central Bank had been put in place.
As EUbusiness announced, it is a first step towards a European banking union and dovetails with moves towards deeper economic and political cooperation aimed at taming the debt crisis which has brought the eurozone economy to a standstill.
But the proposal has driven a wedge between Germany and France, the two biggest eurozone economies and thus crucial to European integration.
While France would like to hand the ECB power to supervise all 6,000 eurozone banks from January, Germany would like it to keep an eye just on the biggest banks and is in little hurry.
ECB chief Mario Draghi said in Tokyo on the sidelines of the International Monetary Fund's annual meet Saturday that reforms to the way European Union banks are supervised would probably not be implemented for another "year or so".