BRUSSELS, 22 October. /Corr. Denis Dubrovin/. The European Commission (EC) has filed a lawsuit against the Czech Republic, Luxembourg, the Netherlands, Poland, Romania and Sweden for delays on the incorporation into national legislation of the requirements of the European Directive on bankruptcy and restructuring of troubled banks. This was announced by the European Commission spokesman Mina Andreeva.
“The European Commission has decided to refer to the European court of justice action against six EU countries: the Czech Republic, Luxembourg, the Netherlands, Poland, Romania and Sweden, because they have still not brought its legislation into conformity with the European Directive on bankruptcy and restructuring troubled banks, which is one of the fundamental elements to create a banking Union of the EU,” she said.
Bankruptcy and restructuring troubled banks in the EU
The development of European principles of bankruptcy and restructuring troubled banks has become one of the most important practical lessons that the EU learned from the global financial crisis of 2008 and the ensuing sovereign debt crisis in the Euro zone in 2010. The cause of the crisis in 2010 was the attempt of the Eurozone to rescue from bankruptcy of all European banks by large infusions of funds from the state budget. As a result, banks were kept afloat, but the financial problem of non-performing loans have shifted to the sphere of government budgets, finding an even larger scale. This has led to a noticeable decline in living standards for 90% of Europeans compared with 2007.
The process of integration of the Directive
To avoid repeating this scenario, the EC and the Eurogroup has developed the European Directive on the principles of the bankruptcy and restructuring of troubled banks. Her task is to ensure the timely solution of the problems of individual financial institutions, without waiting for their distribution in the entire financial system.
To date, only 16 out of 28 countries had completed the process of integrating the Directive into their legislation. The rest are at different stages of its implementation. While this process is not completed, further steps towards a Banking Union the EU is, in fact, impossible, despite the fact that initially, EU leaders hoped to start the European Banking Union in 2012.