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Banker warns: European deposit insurance does not rush

Frankfurt / Main – Frankfurter banker Emmerich Müller warns against a hasty introduction of a joint deposit insurance scheme for savings in Europe. The time is not ripe yet. First, the banks of Europe would have to reduce their legacy.


Picture: European currency 

Frankfurter banker Emmerich Müller warns against too rapid an introduction of cross-border protection of savings in Europe. “In the long run, a joint deposit insurance is part of a banking union, but the time has not yet come,” said the partner of the bank Metzler of the German Press Agency, which was founded in 1674.

Problem loans with a volume of 950 billion euros

“In Europe, we still have a lot of legacy non-performing loans in bank balance sheets, which is blocking not only the development of common European security systems, but also the granting of new loans,” said Müller. EU-wide, the volume of non-performing loans (NPL) according to recent figures still at 950 billion euros.

“It would be unfair to dump the damage already suffered by someone who had nothing to do with the genesis,” said Müller. Often, national policies prevent the problem of bad credit from being better targeted. “We have to be careful that we are not creeping into debt restructuring.”

Savings deposits are already well protected in Germany

In 2015, the European Commission submitted proposals for a European deposit guarantee scheme. For a long time, there was little progress on this point, mainly because of resistance from Germany. In Germany, there are already well-filled pots to secure the bank balances of savers in emergencies. The German financial institutions fear that these reserves would finance losses in other countries. However, by the summer of this year, EU countries are still making substantial progress on the issue.

“Occupy Europe more positively”

“As Germans, we legitimately have the mistrust that other countries want money from us,” said Müller. “On the other hand, we should also bear in mind that we are not only an economic winner of a functioning Europe, but also that since the Second World War we have not had to go to war on our soil, and we owe this to Europe as well.”

Therefore, it was important to “re-occupy the subject of Europe more positively, we must not leave the field to the doubters,” warned Müller. “I expect the new federal government to be a creative actor in Europe’s renewal process and not leave the field to Macron alone.”

In September, President Emmanuel Macron presented a timetable for 2024 that included numerous proposals for far-reaching restructuring of the European Union. Among other things, he wants his own budget and a finance minister for the eurozone. “It would be desirable if we could quickly regain a viable government – precisely because we have to set certain course in Europe,” said Banker Müller.