ECB and the EU Make a Power Grab

The last post about the Greek bailout revisited our constant theme about the love affair Europeans have with technocratic and bureaucratic elites.

"Together with the IMF and the European Commission, a troika of bureaucrats now wields the power to micromanage the taxation and expenditure policies of member states."

 Now, the European Commission is pushing to be the sole resolution authority for winding down national banks, especially those with transnational operations; the European Central Bank is already set to become the sole supervisory authority for banks beginning in 2014.

Talk about moral hazard and conflicts of interest: French and Italian banks are among the largest of the banks with significant balance sheet and systemic risk issues, although Germany has a couple on the potential list also.

How can authorities in Germany give up control over winding down their banks?  Now, national sovereignty issues will again come to the fore.  This debate will play on through the fall elections and should create more division and uncertainty.