Rajoy and Hollande call for quick banking union

Julian Harris
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SPANISH Prime Minister Mariano Rajoy urged his fellow Eurozone leaders to push on with their pledge to form a full banking union, during a joint press conference with French President Francois Hollande yesterday.

Rajoy dismissed the suggestion that German disagreements over the scope of the new regulator were holding up the scheme.

Germany’s Chancellor Angela Merkel has previously warned against rushing into the plan, which would involve the European Central Bank (ECB) supervising lenders across the single currency area.

But Rajoy insisted yesterday that there must be “clear progress” by the year end, with Hollande echoing his call for progress at next week’s summit of European Union leaders.

“Our position is that as soon as the October Council [EU summit] we should make as much progress as possible on the banking union,” Hollande said.

“It’s banking supervision with the ECB responsible at Eurozone level, and all banks should be covered by this supervisor,” he said. “Other steps will then have to be taken on banking supervision but we will have built a solid foundation.”

“The regulator must be credible, and to be credible it must have a wide field to cover,” the French leader added.

German politicians are believed to be arguing that supervision should only extend to the single currency area’s largest banks.

And while EU leaders are thrashing out these plans at the 18 October summit, Greek trades unions will hold a 24 hour general strike, they announced yesterday. “We want the government to withdraw these horrible [austerity] measures, which have brought us such misery,” said Ilias Iliopoulos, general secretary of the public sector union ADEDY.