Euro zone must make first reforms by 2019: French minister

By Leigh Thomas

PARIS (Reuters) – The euro zone must take its first steps toward 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 stabilization 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 amortization, rather than agreeing on how high corporate tax should be, the source added.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.