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Romania will participate in EU banking union

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European_central_bank_euro_frankfurt_germanyPresident Traian Basescu said on Friday that during the European Council he stated Romanian intention to participate in the banking union, given that 75% of the Romanian banking market is occupied by euro area banks.

The President announced that the Council found that the regulation for a single mechanism bank resolution was adopted, which means that the two pillars have, for the moment, regulation. “Single supervisory mechanism was first, and the second regulation, which was missing, was single resolution mechanism. I hope that it will be validated by Parliament, so that, in 2015, the banking union can works,” Basescu said.

The single resolution fund would be financed by bank levies raised at national level. It would initially consist of national compartments that would be gradually merged over 10 years. Creation of a banking union is essential to overcoming market fragmentation and breaking the link between sovereigns and banks.

Preşdintele also said that 2014 will be a year when will be evaluated euro area banks in the first place. “On this occasion, I declared Romania’s intention to participate in the banking union, given that the Romanian banking market operates most banks in the euro area, 75 % of the market being held by banks in the euro area,” Basescu said.

Basescu also said that, as regards on employment policy, emphasis was placed on the main part of this policy which is compliance with the recommendations of the country, within the European Semester. “A special emphasis was put on employment policy. I want to say that the Romanian government has sent the plan for employment of young, which is financed with large sums, Romania having allocated in the first phase €400 million for employment, creating jobs for young people up to 25 years,” said Basescu.

Euro-area member states will negotiate, by 1 March 2014, an intergovernmental agreement on the functioning of the single resolution fund. This agreement, in line with terms of reference, would include arrangements for the transfer of national contributions to the fund and their progressive mutualisation over a 10-year transitional phase. It would endorse the bail-in rules established in the bank recovery and resolution directive as applicable to the use of the single fund.

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