Europe Prepares To Come Clean On Hidden Bank Losses

the French constitutional court Friday upheld its ban on fracking in France , the Associated Press reported. The direction of EU policy and whether renewable energy initiatives should be state-funded has proved divisive among industry and governments. The European Commission, the EU executive arm, released a draft copy of its guidelines for state aid for energy production this week. In it, it dropped a reference to subsidies for nuclear power, which could affect whether governments can use public funding to help finance further plants. wants to expand its nuclear power resources with the help of public funds. ENEL’s Conti said that on the contrary to wanting more subsidies for the energy industry, subsidies had created a “very peculiar” situation in Europe where countries were abandoning nuclear power plans for “non-mature technologies and renewables.” “We want to eliminate subsidies,” he said on Friday. “Too many subsidies are being given on intermittent renewables, too many to local coal and all of these are [leading to] a disaster. ) The end result, Conti noted, was that the environment was not seeing any benefit to subsidies meant to encourage the development of greener energy anyway a moot point for the EU which has carbon emission targets for energy companies in the EU as it aims to get 20 percent of its energy from renewable resources by 2020. The shale gas revolution in the U.S. has further upset European energy companies’ competitiveness and their profits, however. While energy prices have fallen in the U.S. due to the abundance of the cheap natural gas, in Europe, energy especially natural gas prices from Russia — have risen. Europe has subsequently turned to importing cheaper U.S. coal in a bid to offset higher energy prices that have caused controversy among consumers. Gerard Mestrallet, the chairman and chief executive officer of French utility GDF Suez, said the EU was now in a “paradoxical situation” as it turned to coal against a backdrop of greenhouse gas emissions targets.

The president of the European Central Bank underscored the need for action in Washington at the meetings of the International Monetary Fund and the World Bank. “The effectiveness of this exercise will depend on the availability of necessary arrangements for recapitalising banks … including through the provision of a public backstop,” Mario Draghi said on Friday. “These arrangements must be in place before we conclude our assessment,” he said. But the ministers’ talks face an additional hindrance because Germany’s finance minister, Wolfgang Schaeuble, is not expected to attend the two-day Luxembourg meeting. Germany, Europe’s biggest economy, in talks to form a new government. During the region’s debt turmoil, the European Union conducted two bank stress tests, considered flops for blunders such as giving a clean bill of health to Irish banks months before they pushed the country to the brink of bankruptcy. The ECB’s new checks are seen as the last chance to come clean for the euro zone as the bloc tries to set up a single banking framework, known as banking union. The debate opens amid ebbing political enthusiasm for banking union – originally planned as a three-stage process involving ECB bank supervision, alongside an agency to shut failing banks and a system of deposit guarantees. It would be the boldest step in European integration since the crisis. “We have to find a solution now,” said Michel Barnier, the EU Commissioner in charge of financial regulation, urging faster progress in the slow talks. “The next financial crisis is not going to wait for us.” ANGLO-GERMAN AXIS? In one sign of the divisions, Britain has repeatedly refused to sign off on the first pillar of the banking union framework, allowing the ECB monitor banks. Having earlier agreed, London now wants additional assurances from ministers this week that Britain, which is outside the euro and polices its own banks, will not face interference from the ECB-led euro bloc. Britain is likely to find a sympathetic ear in Berlin, which wants to keep London on side in its push to prevent stricter EU emissions rules to protect its luxury car makers.