As EU leaders gather in Brussels for the last EU summit of the year, European Commission President Jose Manuel Barroso welcomed the political agreement reached by EU finance ministers on the Banking Union plan, adding that ‘it was supported politically by the European Council’. ‘While the Commission would have preferred the system based fully on the community approach, we welcome the important progress made by the Council. It is a sound basis for the negotiations with the European Parliament.’ Barroso said.

Heads of state and government are meeting in Brussels on 19 and 20 December for a European Council summit. Security and defence and the economic and monetary union are the main topics on the agenda….(read more)

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On October 13, 2013, the President of the European Commission, José Manuel Barroso, proclaimed that “this is the beginning of the end of bank bailouts” during a press conference in Luxembourg. Barroso’s words signaled a significant shift in European policy towards rescuing failing banks.

Prior to 2013, European countries had repeatedly bailed out their struggling banks, often at great cost to their own national budgets. These bailouts had been a controversial policy for many, who saw them as a waste of taxpayer money that only served to prop up failed banking systems.

Barroso’s announcement came after a meeting of European finance ministers in Luxembourg, where they had discussed a new policy framework for rescuing troubled banks. The new framework, known as the Single Resolution Mechanism (SRM), called for a centralized system of bank resolution that would be used across the European Union.

Under the SRM, the European Central Bank would be granted powers to oversee the resolution of failing banks, while a new fund, known as the Single Resolution Fund (SRF), would be created to provide funds for bank rescues. The intention was for the SRF to be funded by banks themselves, with contributions over a ten-year period.

Barroso’s confidence in the new policy was based on the belief that the centralized system would provide a more coordinated and effective response to bank failures. This, he argued, would reduce the need for individual bailouts by national governments, which would in turn create greater stability and confidence in the European banking sector.

However, critics were quick to point out that the SRM still relied on significant contributions from national governments to fund bank rescues. Moreover, the amount of funding available through the SRF was seen as relatively small, compared to the size of the European banking system as a whole.

Despite these criticisms, Barroso’s declaration marked a significant moment in the history of European banking policy. For the first time, the European Union had established a coordinated framework for dealing with bank failures, which aimed to reduce the need for taxpayer-funded bailouts.

Today, the SRM and SRF remain in operation, although their effectiveness is still the subject of debate. However, Barroso’s words in 2013 can be seen as a turning point in European banking policy, and a sign that the continent was finally moving away from the divisive practice of bank bailouts.