MNI SOURCES: Key EU Meeting Looms On Banking Union Roadmap

EU officials must decide in coming days whether to try and secure a deal on how to complete a Banking Union or take a tactical pause until after the German elections, sources have told MNI.

The roadmap to completion is due to be discussed at the June 17 Eurogroup in Luxembourg, but officials note that the talks remain very difficult, and progress limited. Finance ministers' sherpas are set to test whether there is enough support to proceed when they gather on June 10, to see there is a "willingness on all sides to get to something or whether we see a no-go from some member states.

A route to an agreement seems difficult, with "no willingness to compromise," a senior finance official from an EU member state told MNI, adding that "things do indeed look difficult."

"Germany is on one side and Italy is 180 degrees opposite – the middle ground is not easy to find," another confirmed.

Another explained the pros and cons of going ahead now or waiting: keeping up momentum and clear guidance for the next semester against reduced ambition now or waiting a few months to push through a better deal.

OVERDUE

Some officials stress that any kind of progress is overdue in a dossier that has not seen any real results since 2016 and that a properly functioning pan-euro area banking system is key to economic recovery.

"We need a banking system in place fit to provide the necessary support and lending that the economy needs," said a third source close to the talks.

The talks on a roadmap to complete the banking union have seen little movement in entrenched positions on politically charged topics, such as European Deposit Insurance, regulatory treatment of sovereign exposures (RTSE), crisis management and cross-border consolidation.

That said, the roadmap does not need to meet very high expectations, sources stress, merely identify what can be concretely done in the four main files by the end of the current Commission's mandate in 2024, but even this is not proving easy.

"This is not about setting very high expectations. Whatever we end up with, it won't be a very detailed workplan … It will be more guiding principles for further technical work. It won't be something that is revolutionary, it is really a work programme," the third source added.