NICOSIA: Swedish Finance Minister Anders Borg on Saturday dismissed as "completely unacceptable" European Union moves to place banks across the bloc under the supervision of the European Central Bank.
Borg emerged from talks in Cyprus among finance ministers and central bank governors from the 27 EU states to warn that legislative proposals unveiled last week by the European Commission, due for adoption by the end of the year, would need "long and tough" negotiations to stand a chance.
"There is a large number of countries that are not members of the eurozone that find this solution unacceptable," Borg said of plans seen by the currency union's leaders as central to creating a stable eurozone economic and political structure for the long-term.
Sweden is a member of the EU but not the eurozone.
Borg said that EU treaty guarantees of independence for the Frankfurt based ECB which would mean it could not be bound by European Banking Authority mediation in case of disputes -- meant there was much work to be done "before we are anywhere close to any compromise".
"We cannot accept that the money of Swedish taxpayers is used to bail out foreign banks," he said.
"The whole idea that we would be under the supervision of an institution where we have no voting rights, where our taxpayers' money could depend on decisions taken by an institution where we have no influence, is completely unacceptable."
He said these were "red lines" for the Swedish government and therefore that "the time schedule is too short."
The rules governing new EU-wide bank supervision are meant to be fixed by the turn of the year, but already face obstacles including a German-expressed need to establish a related resolution fund for winding down broken banks.
Germany wants the ECB to focus on the so-called "too-big-to-fail" banks whose failure could wreck the system.
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