By Simon Miller
UK prime minister David Cameron has defended blocking calls for a single European banking regulator.
Speaking this afternoon at a press conference after the European summit, Cameron said that Britain was not going to cede more powers to Brussels.
According to reports, following bad tempered exchanges, Cameron threatened to block the summit agreement if references to a single banking regulator weren’t struck out of the text.
The original agreement was to say: “Existing legislative props on bank resolution and deposit guarantees should be adopted by the end of year. Building on theses the commission will submit by the end of 2012 further legislative proposals in a single European banking supervision system covering all banks, a European deposit guarantee scheme and a European bank resolution scheme.”
Despite being supported by the French EU commissioner for financial supervision Michael Barnier, the text was removed from the final agreement.
Cameron told reporters: “In my view that must be the Bank of England for our banks rather than a single European regulator. It's never entirely clear how far these changes will go, exactly which treaty clauses will be used, that's one of the reasons that when you come to these summits you've got to be absolutely focussed on the text and what you're signing up to. We want a functional eurozone, not a dysfunctional eurozone, but we need those safeguards. Permanent vigilance is required.”
Cameron added that there was a change taking place in Europe as the eurozone followed the “remorseless logic of having a single currency”.
“My job is to make sure we ensure all the safeguards we need so that our say in the single market is safeguarded,” Cameron said.
The summit agreed to recapitalise Spanish banks directly by allowing the €100bn EU bailout to be transferred off Spain’s balance sheet after the European Central Bank takes over as the single currency’s banking supervisor at the end of the year, while the EU bailout funds will begin purchases of Italian bonds to reduce Italy’s borrowing costs.
Italy will also have a lighter set of conditions based on meeting Brussels fiscal targets while there was also a promise to examine the Irish financial sector with the possibility of relieving that government’s balance sheet debt burden.
The full text can be found here.