Sinn Féin - On Your Side

EU's Banking Union has 'failed spectacularly' in its first big test - Carthy

16 February, 2017 - by Matt Carthy MEP

Sinn Fein MEP Matt Carthy has said the EU's Banking Union has "failed spectacularly" in its first serious test of its stated aim of ending taxpayer-funded bailouts.

Carthy is a member of the Economic and Monetary Affairs Committee and the GUE/NGL negotiator on the Banking Union Annual Report voted on this week in the European Parliament.

Addressing the Parliament's plenary session in Strasbourg, Carthy said: "The Banking Union was supposed to end the days of taxpayer-funded bailouts - a laudable aspiration.

"As a representative from Ireland - where our people were saddled with over €60 billion in private European bank debt and who have subsequently suffered from years of austerity at the hands of the Troika and Fianna Fáil and Fine Gael led governments - it is an aspiration that we would share. 

"The effects of this bailout continue to cast their shadow on communities, and the health of the Irish banking sector. Legacy issues and close to a decade of austerity have also contributed to the situation where the Irish banking sector now has one of the highest levels of non-performing loans in the EU."

Carthy continued: "In recent months, we have seen the first real test of the new rules on bank recovery and resolution in the Italian banking crisis, particularly regarding the so-called precautionary recapitalisation ofMonte dei Paschi di Siena (MPS).

"And we have to admit – the stated goal of the Banking Union of ending pubic bailouts, and solving the too-big-to-fail problem, has failed spectacularly.

"Italy makes it clear for the world to see that taxpayer-funded bailouts can continue under these weak and loophole-ridden rules.

"Meanwhile, in another display of opaque decision-making, the ECB significantly revised its calculations on how big the MPS capital shortfall was in December. It almost doubled the figure and didn’t even bother to tell us why. Is MPS actually solvent? If not, it doesn’t qualify for public assistance.

"We need rules that truly prevent taxpayer-funded bailouts.  We need to address the bad loan problem by ending harmful austerity.  And we need to finally step up and address the too-big-to-fail problem by unblocking the Bank Structural Reform proposal that separates commercial and investment banking. Otherwise we are set to repeat history and it will be ordinary, decent families who will again pay the cost."

Connect with Sinn Féin