Finance ministers from the 27 European Union nations diverged
over a timetable for bringing banks under a new regulatory plan.
European Union finance ministers were expected on Tuesday to seek
ways to overcome differences over how to regulate European banks
after a sharp and public disagreement about making Greece's debts
sustainable into the next decade.
A plan to establish a single banking supervisor under the aegis
of the European Central Bank for the 6,000 lenders in the euro area
was on the agenda for a second day of talks that had concentrated
Monday on the Greek situation, which still threatens to derail the
euro zone after dragging on for more than two years.
The creation of the banking supervisor is seen as a main step to
breaking the so-called doom loop between lenders and governments
that has brought a number of economies in Europe, including Spain's,
to the brink.
Germany made the creation of the single supervisor a prerequisite
for states to tap a newly created European bailout fund and use the
money to recapitalize their banks directly.
But Luc Freiden, the finance minister for Luxembourg, said
Tuesday that the system still could be months away.
"We shouldn't be fixed to dates," Mr. Freiden said. "If it takes
three months longer, it's no problem."
The European Commission has said a unified system of regulation
could be up and running next year. Germany is among countries that
have urged caution, saying that rushing the system would risk
creating new loopholes. Britain and Sweden say much work still needs
to be done to ensure the system does not discriminate against
countries that remain outside of the euro area.
"We cannot see a compromise with only the current modalities on
the table," Anders Borg, the Swedish finance minister, said Tuesday.
"The E.C.B. could be the supervisor but then we need to consider a
treaty change," he said. "Either you must change the treaty so it's
clear that every member is treated equitably, or you need to move it
outside of the E.C.B."
Finance ministers were also expected to discuss increasing
capital requirements for banks and how to more closely monitor the
draft budgets of E.U. members and correct excessive deficits.
In a sign that fixing the Greek economy and the euro would
continue to be a rancorous process even after three years of crisis,
Jean-Claude Juncker, the prime minister of Luxembourg, and Christine
Lagarde, the managing director of the International Monetary Fund,
drew strikingly different conclusions late Monday about how long it
should take to bring the towering Greek debt under control.
The disagreement is a hugely sensitive matter for Greece's
biggest creditors in the euro area and for Germany in particular.
The government in Berlin wants to avoid the political fallout from
paying higher costs associated with meeting a target set by the
I.M.F. for cutting Greek debt to 120 percent of gross domestic
product by 2020.
Wolfgang Schauble, the German finance minister, said Tuesday that
meeting the I.M.F. target was "possibly a little too ambitious"
given the worsening economy across Europe.
Mr. Schauble also said Greek creditors would be able to find ways
to help the country meet the higher costs of delaying some of its
previously agreed targets to 2016, without handing over more money.
