EU to present banking union plan
European Commission will present its plans for a banking union on September 11.
BRUSSELS - The European Commission will present its plans for a banking union, part of efforts to tame the eurozone debt crisis, on September 11, a European source said on Tuesday.
"A plan will be ready on September 11," the source said, adding that in the meantime the details will have to be nailed down.
The new entity, agreed on at a 'breakthrough' June 28-29 EU summit, is meant to supervise the banking industry in the bloc, having a key role in winding up failed lenders so that they do not undermine the financial system.
The banking union will work with the new permanent eurozone rescue fund, the European Stability Mechanism, which will be allowed to aid needy banks directly so as to avert problems and avoid adding to state debt.
Spain is expected to be the first beneficiary of the new system, with its EU partners having already agreed to provide up to 100 billion euros ($123 billion) to help its stricken banks.
The banking union plan, if it is unveiled on September 11, will come just one day before the German constitutional court is due to rule on whether the ESM is compatible with the country's constitution.
It is expected that the court will give its approval but the considerable delay after the ruling was put back to September 12 following a hearing in July has unsettled financial markets.