Tuesday, May 14, 2013

Spain, Portugal push for full banking union as Germany finds hurdles

Spain and Portugal called on Monday for the euro zone to complete a banking union as Germany underscored legal hurdles before a central element of the plan to deal with failing banks can be introduced.

"It is indispensable that we stick to the agreed calendar on banking union and that we take steps to make sure families and small companies receive credit," Spanish Prime Minister Mariano Rajoy told reporters.

"Banking union is the credibility test of the European Union," he said, after meeting Portuguese Prime Minister Pedro Passos Coelho, who backed his calls for progress on Europe's most ambitious reform of the financial crisis.

The call came as finance ministers from the euro zone met in Brussels, ahead of which German Finance Minister Wolfgang Schaeuble reiterated the need for a change to EU treaties to underpin the new system of bank resolution.