Some in Europe Resist Reach of Central Banking Plan

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The New York Times
Thursday, September 13, 2012

Some in Europe Resist Reach of Central Banking Plan

By JAMES KANTER and STEPHEN CASTLE

BRUSSELS — The European Commission president, José Manuel Barroso, described the proposal for a single supervisor for the region’s banks on Wednesday as the first step in a renewed drive for a federally unified Europe.

But immediate dissent from different European quarters over the ambition and scope of the banking plan, as well as concern about its feasibility, were reminders that a call like Mr. Barroso’s for “more Europe” as a solution to the Continent’s ills might be more easily said than done.

Delivering his annual State of the Union address to the European Parliament in Strasbourg, France, Mr. Barroso outlined a plan for more central banking regulation as a crucial part of the effort to resolve the region’s debt crisis.

The proposal, which would require the unanimous approval of the European Union’s 27 member nations, would give the European Central Bank the power to withdraw banking licenses, fine noncompliant lenders and require all 6,000 euro zone banks to join the system by Jan. 1, 2014.

Mr. Barroso also opened the door to a new discussion on revising the bloc’s rule book, even invoking the word federation to describe his ultimate goal. But something akin to a United States of Europe is regarded as a step too far by many Europeans, who fear a loss of national sovereignty.

“A deep and genuine economic and monetary union can be started under the current treaty but can only be completed with changes in the E.U. treaties,” he said. “I call for a federation of nation states, not a superstate.”

He indicated that proposals for a new treaty could come as soon as 2014.

That will raise concerns among some politicians who remember how plans to draw up a constitution for the bloc took several years to draft and were then rejected by referendums in France and the Netherlands in 2005.

The Lisbon Treaty, which took the place of the constitution, was intended to be the last redrawing of the rules for many years. Any new treaty would require the approval of all member states.

Seeking to paint himself as a moderate with ideas that could stem extremism during a period of economic distress, Mr. Barroso said that “we must not allow the populists and the nationalists to set a negative agenda.”

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