PARIS: The euro zone must take its first steps towards reforming its economic regulations and institutions by the start of 2019 at the latest, French Finance Minister Bruno Le Maire said on Monday.
Le Maire said progress on reforming financial sector regulations and converging tax rules was the immediate priority, before tackling the euro zone's crisis stabilisation mechanisms and setting up a joint budget further down the line.
"We are advancing phase by phase, the first includes banking union, capital market union and fiscal convergence. In these areas, progress must be made by the end of 2018 and at the latest by the start of 2019," Le Maire said in a New Year's speech to French economic representatives.
A key part of its plan to protect itself against future financial crises, the euro zone launched its so-called banking union in November 2014, when the European Central Bank became the bloc's single banking sector supervisor.
However, since then the euro zone has struggled to make progress on the other two pillars of banking union, which are a single mechanism for winding up troubled banks and a joint guarantee for banking deposits.
A French finance ministry source said that progress was being held up by failure to agree how to value sovereign debt on banks' balance sheets.
That is particularly a concern for Italy where banks' balance sheets are heavily burdened with Italian government bonds, the source said.
On capital markets union, differences between France and Germany on bankruptcy law remained a major, but not insurmountable, hurdle, the source said.
On tax issues, the aim was to agree joint rules for calculating how much companies owe, particularly on amortisation, rather than agreeing on how high corporate tax should be, the source added.
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