Europe’s finance ministers are working against the clock to solve the thorny but crucial issue of agreeing on further reforms to strengthen the region’s banking sector.
Decisions on securing Europe’s economy will be put on hold in a few months as the region gears up for the elections to the European Parliament in May.
“It’s very important that we stick to that timeline,” said the Netherlands’ Jeroen Dijsselbloem, who chairs the meetings of finance ministers from the 17 European Union countries that use the euro currency.
But the Eurogroup meeting in Lithuania Friday on setting up a single body to restructure or unwind bust banks quickly hit a wall as the European Central Bank clashed head-on with Germany, the bloc’s biggest economy.
Governments must strike a compromise on the complex legislation by December, Dijsselbloem said. If they fail, the legislation won’t be able to clear all necessary hurdles before the European Parliament descends into full-time campaign mode in April and the European Commission sees its term expiring in fall. That could add a delay of about 18 months, the EU Commission, the bloc’s executive arm, has warned.