THE ESTABLISHMENT of a European banking union would be a “pro-consumer” move but care should be taken to avoid isolating Britain, former taoiseach John Bruton has said.
Mr Bruton, who is president of the IFSC Ireland group, told an audience in Brussels that the time was rapidly approaching for EU leaders to definitively settle the debt crisis. “I don’t think we need a succession of meetings . . . and I don’t think that the markets will allow that,” said Mr Bruton.
He added that EU leaders should learn the language of the people they represent, saying the “opaque language” often heard in Europe was cast in a form that “some people couldn’t possibly hope to understand”.
A banking union – embracing intrusive pan-European regulation – was emerging as a key element of the response to the debt crisis, he told the Institute of International and European Affairs.
The idea also involves the development of European deposit guarantees and a common resolution scheme for failing banks.
He would not use the word populist in relation to this initiative, but said such a move would be in the “popular” interest because it would help to confront the problem of banks too big to fail.
Mr Bruton noted British scepticism about the banking union initiative and said any decision by London to exclude itself could pose serious questions for the Republic and Europe.
In the Irish context he noted the depth of the trading relationship with Britain and the land border with Northern Ireland. In the European context, such a development would raise questions around the operation of the single market.
Speaking afterwards, Mr Bruton said it remained possible that some financial business might migrate to Ireland from London if Britain stood aside. It was his understanding, however, that the EU authorities would endeavour to ensure that Britain was not isolated as the initiative advances.
The adoption of pan-European banking regulation would curtail the power of domestic regulators, resulting in a situation where “someone from somewhere else would be coming in and closing the bank”. Asked about the failings of the original stability and growth pact, he said the limits on debt and budget deficits were appropriate. “What was missing was proper enforcement,” he said.
