Angela Merkel’s conservatives and the Social Democrats (SPD) have struck a deal on the contours of a European banking union under which a body attached to the Ecofin council – not the European Commission – would decide when to close failing banks.
Several sources involved in coalition talks between the parties told Reuters the two camps had also agreed that funds from the European Stability Mechanism (ESM) should not be directly available for winding down financial institutions.
The sources said a number of legal questions still needed to be resolved. But the goal is to sign off on the agreement early next week so that Finance Minister Wolfgang Schaeuble can go to a meeting with his EU colleagues on Thursday with a firm German position on the issue.
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