The EU has called on Ministers to Re-establish a Delayed Banking Union

The EU’s long-delayed banking union plan was presented to finance ministers on Tuesday. The head of the Eurogroup, Irish Finance Minister Paschal Donoche, asked his colleagues to discuss the basic principles of the EU deposit insurance scheme.

If enacted, it would be the latest in a series of measures that have come into force since the 2008 financial crisis, to hand over control of Europe’s largest creditors to the European Central Bank.

“After many years of intense discussion, we are now well aware of each other’s views and I have come to a compromise,” Donoche told reporters after a meeting of 27 ministers.

If adopted, the reform would be a significant breakthrough in building a deeper European unity. Nordic countries like Germany have long been reluctant to adopt this scheme for fear that they would have to pay taxes to their less financially sensible neighbors. It is also expected that Italy, with large debts, will oppose the reform.

To break the deadlock, Donoee is asking ministers to consider a two-phase path to a scheme that will last for years.

European depositors are currently insured for up to € 100,000, funded by EU national governments. But many EU countries are vulnerable to financial shocks, such as Ireland, Spain, and Greece during the Lehman Brothers crisis, which began in 2008.

Following an official hearing on the plan on Tuesday, EU ministers are expected to discuss the details at a meeting in June.

If allowed, the European Commission will draft a legal proposal by the end of the year, which will also require approval by the European Parliament.