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Eurozone leaders agree on bank recapitalisation
EU leaders have agreed to use the European Stability Mechanism to support banks directly, without adding to government debt.
Prime Minister Lawrence Gonzi with his Luxembourg countepart and Eurogroup president Jean-Claude Juncker (right).
Eurozone leaders agreed to the loan of up to €100,000 million to recapitalize the Spanish banking sector is channeled to the Government Spanish through the European Stability Fund (EFSF) and will be transferred to the European Stability Mechanism (ESM) when it enters into force, President Herman Van Rompuy said.
"We urge the speedy conclusion of the memorandum of understanding that will accompany the financial assistance to Spain for the recapitalisation of its banking sector and reafirmarmos that this aid will be provided by the EFSF until the MEDE enters into force and then will be transferred to this without acquiring the preferential status", Van Rompuy said after the meeting of the 17 leaders of the eurozone.
Through this procedure, the eurozone may directly recapitalise the banking "as soon as we have an effective European supervisor mechanism and we can change the EFSF to the MEDE to break the vicious circle between banks and sovereign debt".
The eurozone leaders said the bank recapitalisation proposals should be considered "as a matter of urgency" by the end of the year.
Italian Prime Minister Mario Monti said the agreement was a "very important deal for the future of the EU and the eurozone." He added that "it is a double satisfaction for Italy".
Spain has requested aid for its struggling banks but the country wants to avoid taking in more debt.
Van Rompuy also said a eurozone-wide supervisory body for banks would be created.
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Why should we and other people be forced to incur debt just to save irresponsible banks? Why aren't those who are responsible for taking the wrong decisions at banks be made to pay for their mistakes and not given golden handshakes amounting to tens of millions of Euros? Why should they have fantastic salaries of millions of euros every year and bonuses amounting to millions every year and they just walk away with a golden handshake instead of being made to pay for their mistakes?
Joseph MELI •
Its the citizens recapitalisation that they should be caring for and not the crooks who got us into this mess in the first place.What precisely has happened since 2008 reagrding protection measures as these financial terrorists-aka bankers- are still screwing their customers with gay and arrogant abandon all over the world and not just within the EU and Malta and now once more we are taking care of them so that they may, with inpunity , rip us off again and again.
