The Eurogroup meeting in Luxembourg

The 27 EU finance ministers meet on 20 and 21 June in Luxembourg to try to bring a new stone to the building of the banking union, with direct bank recapitalization and new rules to bail them out or liquidate without resort to public funds. Discussions should be long and difficult. The issue of direct recapitalization of troubled banks by the European Stability Mechanism will be debated. A small portion of the 500 billion euro fund will be reserved for this purpose. It should be between 50 and 70 billion euros. It might be more difficult to reach agreement on the degree of retroactivity of the mechanism. Anyway the direct recapitalization may only be applied when the single supervisor in the euro zone will be operational, not before summer 2014. In conclusion the 27 EU ministers will  consider another pillar of the banking union: the establishment of common rules for bail or the ordered liquidation of troubled banks, avoiding to use the public funds.