Berlin conditions to support ESM banks

His Yannis Angelis

If it is possible to agree on a specific redemption schedule for red-docking at a tolerable level in all countries, it is very likely that the "guarantor" of last resort will be badigned to the ESM for the European Settlement and Settlement Fund, effective 2024.

On the Berlin side, this fund could come into full force with the help of ESM even before 2024 if the green light is deemed … enough.

The critical debate will take place on Tuesday morning at the Eurogroup. And as long as there will be an agreement, the proposal will be approved at the mid-December summit and will be touted as the great success of promoting euro area banking integration three months before the release of the United Kingdom from the EU.

The proposals and alternative plans for the calendars and percentages to which the "red loans" have so far not filtered and remain a secret seal in front of Tuesday's Eurogroup meeting.

Greece, Italy and Cyprus are three "countries" to promote the agreement, but the problem does not only concern the three countries, the euro zone's red bonds exceeding 800 billion euros although, according to Commission data released on Wednesday, it is noted that they have begun to shrink in volume.

According to information provided by Capital.gr, one of the proposed scenarios combines a particularly complex mechanism with the possibility of using the Fund in a crisis with the rate of depreciation of non-performing loans by each bank.

For Greece, the question is of great importance, as the final decisions will determine whether the return of investor confidence in Greek banks will be facilitated and therefore the return of Greek banks to their true role in the economy …

In any case, as the sources report in the Brussels report, even if no agreement is reached in Brussels on Tuesday, the efforts will continue to prepare the ground for a real step forward towards the consolidation of banking activities during the Mountain peak. Whenever the opportunity to speed up the decisions seems to be very difficult, it is to trigger procedures for the creation of a single deposit guarantee fund (EDIS).