The EU Commission issued, on 28 May, 11 reasoned opinions against Member States (MS) owing to their total or incomplete implementation of the Directive (BRRD).
The Directive (2014/59/EU), whose implementation deadline expired on 31 December 2014, is a centrepiece of the EU’s Banking Union that was put in place to create a safer and sounder financial sector in the wake of the financial crisis. It set out a single rulebook for the resolution of banks and large investment firms in all EU MS.
The new rules as implemented by the MS, and applicable from 1 January 2015, harmonise and improve the tools for dealing with bank crises across the EU. As such banks are required to prepare recovery plans to overcome financial distress. Competent authorities (CA) are also granted a set of powers to intervene in the operations of banks to avoid them failing. If they do face failure, authorities are equipped with comprehensive powers and tools to restructure them, allocating losses to shareholders and creditors. CA have the powers to implement plans to resolve failed banks in a way that preserves their most critical functions and avoids taxpayers having to bail them out.
Further, the arrangements to deal with failing banks comprise pure national level as well as cooperation arrangements to tackle cross-border banking failures.
Bulgaria, Czech Republic, France, Italy, Lithuania, Luxembourg, the Netherlands, Malta, Poland, Romania and Sweden have 2 months to correct the situation or risk being referred to the Court of Justice (CJEU), where heavy pecuniary fines could be imposed if the Court confirms the non-compliance.
NB. A reasoned opinion is the last administrative stage of an infringement procedure. It follows the letter of formal notice and precedes the referral to the CJEU (contentious phase).