EU comes to tentative deal on bank supervision

Leaders of European nations, at the European Union summit in Brussels, have agreed on “the objective of completing the legal framework by the end of the year” for a new mechanism for supervising banks within the jurisdiction of the EU. The agreement is allegedly a tentative one, considering how Germany and France have been continuously disputing the timeline for creating the new single supervisory mechanism, or SSM. Chancellor Merkel of Germany has called for the EU to be granted the power to veto the state budgets of its members. The rationale is that, with such power, the EU would be able to prevent the build up of extreme national debt which has been plaguing the nations of Europe during the global economic crisis. The European Central Bank would, under the new system, maintain a permanent rescue fund set aside for subsidizing struggling national banks. The goal is to avoid tax payer funded bailouts like those that have been utilized throughout Europe to avoid financial meltdown during the crisis. A discussion about a plan for this new system in the EU is being held amidst a notably calmer fiscal climate as concerns about debt are less immediate.