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Direct bank recaps don't require EU treaty change - Commission
July 2, 2012 / 10:51 AM / 5 years ago

Direct bank recaps don't require EU treaty change - Commission

BRUSSELS, July 2 (Reuters) - No changes to the treaty governing the euro zone’s permanent bailout fund are required to allow the fund to recapitalise banks directly, the European Commission said on Monday.

The Commission’s spokesman on economic and monetary affairs said articles 14-18 of the treaty set out the instruments the European Stability Mechanism (ESM) has at its disposal to maintain financial stability in the euro area.

“Article 19 continues that the board of governors may decide to make changes to that list,” spokesman Simon O‘Connor told a regular news briefing.

“That is our understanding of where we stand on that, that it would not require a change to the treaty,” he said.

EU leaders agreed at a summit on June 28-29 that the ESM would be allowed to recapitalise struggling euro zone banks once the European Central Bank has been given more direct oversight for the euro zone’s banking sector. (Writing by Luke Baker; editing by Rex Merrifield)

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