France and Germany, seemingly set on divergent political paths, pulled out all the stops Thursday to lay the symbolic foundation stone towards greater eurozone integration.
Settled in a 14-hour negotiating marathon, the dawn deal to set up a new watchdog for lenders is a key step towards a cherished goal of “banking union,” the bedrock of a more closely-integrated European Union better able to withstand future financial crises.
But Berlin and Paris were as divided initially on the scale and scope of the Single Supervisory Mechanism (SSM) as their leaders are on the political right and left — a trait that led analysts to worry that the eurozone would slump back into inertia awaiting September 2013 polls in Germany.
“At the beginning, let’s say it openly, we were far apart … but we came to this meeting (of European finance ministers) with positions which were very close,” French Finance Minister Pierre Moscovici told AFP.
Berlin favoured a slow but steady approach beginning with the biggest banks only, while Paris wanted all lenders included from the start.
“Our teams have been in constant contact and we got in touch just before the meeting to bring our views into line” so as to avoid an anticipated confrontation, Moscovici said.
