BUCHAREST - Mergers in Europe’s fragmented banking sector are necessary to make the sector more resilient as the euro zone seeks to protect itself from future crises, France’s finance minister told Reuters in an interview.
“I consider that today European banks are still too fragmented and we need banking consolidation,” Le Maire said in Bucharest, where he was attending a meeting of EU finance ministers. Le Maire, who has attended some of France’s most prestigious schools and held numerous senior posts in government, said the euro zone needed to finalize in coming months plans for a backstop for banks saddled with bad loans, and better integrate capital markets notably by agreeing to harmonize insolvency laws - a sensitive issue for some countries.
Le Maire also wants the euro zone to quickly thrash out plans for a shared budget aimed at encouraging convergence among the euro zone’s economies. In particular, details on its governance and how it sits in relation to the broader EU budget remain to be hammered out.“The euro zone will not survive growing economic divergences between member states. We have to equip ourselves with the instruments to reduce the divergences,” he said.
With EU parliament elections due in May, the staunchly pro-Europe minister weighed into the debate about the future of the Union this week with a book warning that Europe must guarantee it does not fall behind China and the United States on technological progress, or risks being dominated by them.
Fiscality can emerge.
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