Britain is heading to a European ‘banking union’. A recent measure to set up an emergency fund to bail banks is the first concrete step to bringing the banking sectors of Member States ever closer to supervision by Brussels. The banking union was agreed to go ahead a year ago. Some European leaders, like the Italian PM Enrico Letta are moaning about languid progress as Germany resists moves to establish a single resolution agency.
This follows on the heels of the Cyprus scandal where people’s bank accounts were pillaged in the midst of recession. Last month the European Parliament had approved a raft of rules on banker’s bonuses and capital requirements. The UK’s Finance Minister was the lone voice of protest, saying a cap will be counter-productive. Unsurprisingly, banker’s salaries are expected to rise significantly, and Vicky Ford MEP said as much in the midst of voicing support for Mr Osborne.
Britain is Europe’s centre of banking, yet our leaders are forced to kneel to demands from Brussels over one of nation’s most important assets. Godfrey Bloom MEP of UKIP blamed the banking system that allowed bankers to get away with ‘criminal activity’. Indeed, these light-hearted efforts, labelled by the Economist as a banking union ‘on the cheap’, will not avert another crisis. Instead, the measures represent another disgraceful episode of forcing taxpayers to pay for the mistakes of others.