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Fiji Time: 1:07 PM on Thursday 23 May

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EU struggles to reach deal

Afp
Friday, May 04, 2012

BRUSSELS - European Union (EU) finance ministers have struggled to reach a deal on rules to shelter banks from future crises, as Britain and Sweden fought for the power to impose tougher defences.

The talks in Brussels went into overtime as the ministers sought to find a compromise after more than 12 hours of a debate pitting Britain, Sweden and some eastern European nations against France, Germany, Luxembourg and others.

The special meeting was called to find a common EU position on the Basel III regulation, which will require banks to increase their capital buffers to avoid a repeat of the massive bailouts they received in the 2008 financial crisis.

But Europeans were sharply divided, with Britain and Sweden seeking freedom to impose tougher capital requirements than under Basel while the Franco-German bloc wants all 27 EU nations to follow the same standards for more than 8000 banks.

British finance minister George Osborne, whose country is home to Europe's biggest financial sector, used stark terms to say no to the latest compromise presented by Denmark, which chairs the EU rotating presidency.

"I'm not prepared to say something that is going to make me look like an idiot five minutes later," Osborne said.