Interview: Banking union - a cure for the crisis?

Between 2008 and 2011 EU Member States injected about 4.5 billion euros to save some of Europe's banks from bankruptcy. Today the EU calls for banking union to protect depositors, help cushion the financial sector from shocks, and restore confidence. But is this really a step to pull Europe out of the crisis? We asked German MEP Sven Giegold and British MEP Richard Ashworth if they see a banking union as a positive or a negative step. The 'Europeanisation' of banking supervision is positive. There is no one solution to the crisis, but this is one element for a reinforced common economic and financial policy that we need to get out of the euro crisis. We see it as a negative. We wouldn't want to accept it for the UK, but we do fully understand the need for the 17 eurozone nations to work much closer together, to pool resources and to have an element of centralisation of control. But we want to strongly make the case for the 10 nations who do not wish to join that. We want to defend their rights and we want to ensure that those regulations on the 17 eurozone nations do not adversely impact on the nations who are not members. Would a banking union signify a loss of sovereignty for the Member States? Why speak of sovereignty, when today all eurozone members must pay for a banking crisis in Spain? It has nothing to do with sovereignty. Rather, a common currency means shared powers and solidarity at the same time. But when it comes to small banks, there's no sense in making Europe-wide decisions. There we need local solutions. If you're going to work together as nations, you've got to surrender an element of sovereignty and you're going to have to weigh up very carefully the benefits achieved from it. We feel that with the eurozone, the solution to much of that crisis is a pooling of sovereignty, a pooling of resources and regulation. It's called federalism in many countries. We understand that's what they need to do. If it's that which will resolve the euro crisis, so be it. But we also strongly defend the rights of the 10 nations who are not eurozone members. Why does the City see a banking union as a threat even though the UK isn't in the eurozone? I think London fears something different. When you're part of a common market but no longer want to follow the important rules... This makes you weaker, and the fear is that the City, represented by the UK, will be in a minority compared with the eurozone banking supervision authorities. The great strength of the City has been an outward-looking, entrepreneurial wealth-creating organisation. The great strength of it is the freedom which it has and the entrepreneurial skills and abilities. Any kind of regulation will inevitably control that entrepreneurial spirit and the freedom to operate on an outward-looking global nature. Now we can't accept that control. Is this a guarantee against injecting more capital into the banking sector? No-one can guarantee it won't happen again. What is important is a system of controlled bankruptcy for banks so that they can go bankrupt without the whole financial system collapsing. Not necessarily. It would be a way to prevent those problems in the first instance. So the controls which will be put in place centrally would prevent the crisis arising. But to say, or to guarantee that we will not allow the money to flow into those banks... No, you couldn't say that, because if you've got a banking union, that is the whole point of it. It is to avert the crisis.

EuroparlTV video ID: 4c4bda3f-bbda-43c9-9eed-a0ca008c31ef