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Political Economy

Swedish government not yet ready for EU banking union - Finance Minister

Friday, 30 November 2012
The Swedish government will vote against any decision favouring the EU banking union at the Ecofin meeting next week.

Swedish Finance Minister, Anders Borg, told reporters on Friday about it, and went on to add that there is a clear position in the Swedish Riksdag's EU committee that the proposal is not ready to be decided on because there are a number of large complex query where the dividing lines and principles are very large.

He said that the need for additional meetings and that "we are ready to negotiate every day, every hour" until the end in order to arrive at a compromise.

The EU is very vital for Sweden as it derives about half of its gross domestic product from exports to the region making it sensitive to the slowdown in important markets like the debt-saddled euro zone. Roughly, a third of the goods shipped from the Nordic state go the euro zone.

"We judge that we have not reached the point where a decision can be taken on the banking union at the Ecofin meeting, there are a number of important questions remaining," Anders Borg said after meeting with lawmakers in the Swedish capital to discuss the matter.

Anders Borg said, among other things, that Sweden's position is that the euro countries and non-member states should have the same legal status and the right to vote in the Board of Supervisors, so that the proposal of the Governing structure is "deeply imbalanced".

This is because among other things, Swedish policy makers are worried that the current proposal terms mean Swedish banks and tax payers will be made to pay for deficits in the banking sectors of other countries.

In addition to these difficulties, there are also ongoing confusion about how the voting rules of the European Banking Authority should look. Sweden considers that the influence of non-euro countries must be secured and that they can not be run over by the euro area countries.

Furthermore, Sweden must have a satisfactory solution of capital adequacy and deposit insurance and crisis resolution mechanisms, according to the Finance Minister.
By Scancomark.com Team

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