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Euro Zone Needs to Push on With Banking, Bailout Reforms-Slovak Finance Minister – New York Times

In a speech at the Globsec Tatra Summit conference on Saturday, Kazimir urged the euro zone to squeeze the maximum out of the current momentum while the bloc waits for a government to be formed in European powerhouse Germany.

“We have created expectation and thanks to favourable political winds a window of opportunity has opened for us. This window, however, has started to close,” he said, referring to the process of coalition-building in Germany.

“My humble suggestion would be to … harvest low-hanging fruits: complete the banking union tomorrow, transform the European Stability Mechanism and keep drawing Europe’s future architecture – institutions, rules, carrots and sticks.”

EU leaders agreed last week they would kick off the discussion on the reform of the euro zone and completing their banking union at a euro summit in the middle of December.

To complete the banking union, leaders need to agree that the euro zone bailout fund is the financial backstop for the a single resolution fund for banks, in case it runs out of money.

But the key element still missing – a pan-European scheme to protect deposits – is likely to be more difficult because Germany is strongly against it.

Kazimir said his vision for a complete, prosperous and stable euro zone includes a complete banking union and a working capital markets union.

He also suggested building a fiscal capacity, another word for euro zone budget, to compensate the loss of national monetary policy with a shield against asymmetric shocks, and introducing a no-bailout rule and sovereign debt restructuring.

The euro zone needs to make its fiscal rules simpler and more predictable, he said.

(Reporting by Tatiana Jancarikova; Editing by Alison Williams)

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Euro Zone Needs to Push on With Banking, Bailout Reforms-Slovak Finance Minister – New York Times}

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