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Really Blocking a Banking Union? : Germany's Reluctance towards pan-European Banking-Resolution

Stahlhut, A.M.P. (2014) Really Blocking a Banking Union? : Germany's Reluctance towards pan-European Banking-Resolution.

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Abstract:In the recent two years the European Banking Union has been a chief project in European financial integration. Apart from European banking supervision and attempts to integrate deposit insurance on EU-level the member states have agreed to also harmonize the resolution of banks: A Single Resolution Mechanism (SRM) seeks to protect taxpayers in Europe from assuming the costs of resolution and to maintain financial stabilty in the internal market when banks are wound up. Although states have therefor charged the Commission to develop a common policy for banking resolution, Germany gains particular attention in European negotiations for objecting to the regulation establishing a single framework. Newspapers report that the German finance minister has announced to block the resolution mechanism (Schäfers, 2014, January 21), for which he is criticized sharply – even by parties on domestic level. It therefore seems as if domestic opinions on European banking resolution depart substantially wherefore the German position appears worth for an in-depth study. To this end European integration of banking resolution is embedded into the theoretical framework of liberal intergovernmentalism that provides for a liberal theory on national preference formation. The paper grasps the demands of German actors on banking resolution in Europe through a content analysis on the basis of newspaper articles, position papers of domestic interest groups and parliamentary debates. The analysis reveals that various actors fear to bailout banks in other states or will have to assume foreign liabilities by way of the mechanism. For that reason they seek for a more intergovernmental design for EU-banking resolution. Keywords: Single Resolution Mechanism (SRM), Germany, Liberal Intergovernmentalism, domestic preference formation
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:88 social and public administration
Programme:European Studies MSc (69303)
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