Comments before EU leaders' summit

Published October 18, 2012

| Reuters

EU leaders meet on Thursday at a summit where they will try to bridge deep differences over plans for a banking union.

It will be the fourth time EU leaders have met this year and the 22nd summit held since the crisis erupted in Greece in late 2009. Diplomats expect no breakthroughs at the two-day gathering, with the agenda focused instead on longer-term efforts to retool the region's banks and economies.

Following are comments by EU leaders and officials ahead of Thursday's talks:

FINNISH PRIME MINISTER JYRKI KATAINEN

ON BANKING UNION:

"I hope everybody shares the big picture that we should be capable of separating sovereigns from the banking crisis.

"Of course there are some practical challenges still, for instance how to integrate the outside the euro zone countries into the arrangement, and this is very important for Finland.

"We need to create a system in which all the member countries can join."

ON WHEN EFFECTIVE BANKING SUPERVISION COULD BE IN PLACE:

"It's not a question of one or two days or weeks. The quality of the decision is the most important thing. But we want to move on as fast as we can.

"The Finnish position is that we have to work as fast as possible, because we need a European supervision and supervisory body, but it's not the most easy thing to create.

"So that's why the quality of the decision is the most important thing."

BRITISH PRIME MINISTER DAVID CAMERON

ON SINGLE MARKET AND COMPETITIVENESS OF EUROPEAN UNION:

"There is a global race taking place, and some countries are going to make it and some countries are going to struggle and there is a danger of European countries and the European Union falling behind.

"So I think what is absolutely vital is that we encourage enterprise, we cut the costs of regulation on our businesses, we do trade deals with the some of the biggest economies in the world like America, like Japan, and with fast-growing countries as well.

"And finally, perhaps most importantly, we look at the greatest asset we've got, which is the single market, which is the single biggest market anywhere in the world, and we complete that market.

"It is its 20th anniversary right now, but it still isn't finished, in digital, in services, in energy, and that is the agenda I'll be pushing very hard at this council."

AUSTRIAN CHANCELLOR WERNER FAYMANN

ON THE POSSIBILITY OF A EURO ZONE BUDGET:

"I actually don't think that we need a euro zone budget. With the financial transaction tax (FTT) not all countries are with us.

"I would prefer if we focused on how we could integrate the FTT and other measures into the new common budget, against youth unemployment."

CZECH PRIME MINISTER PETR NECAS

ON THE IDEA OF A EURO ZONE BUDGET TSAR/SUPER COMMISSIONER:

"I would not say it would be a good idea. We have enough instruments to improve fiscal discipline, we've got the six pack, we'll have the two pack, we have the fiscal compact, and I don't see any reason to increase the number of commissioners."

FRENCH PRESIDENT FRANCOIS HOLLANDE

ASKED ABOUT THE PROPOSAL FOR A SUPER COMMISSIONER WITH A RIGHT OF VETO OVER NATIONAL BUDGETS:

"The topic of this summit is not the fiscal union but the banking union, so the only decision that will be taken is to set up a banking union by the end of the year and especially the banking supervision. The other topic is not on the agenda."

EU ECONOMIC AND MONETARY AFFAIRS COMMISSIONER OLLI REHN

ON POSSIBILITY OF CURRENCY COMMISSIONER WITH POWER OVER BUDGETS:

"These proposals are in line with recent and ongoing reforms of economic governance and certainly will be a key element of negotiations towards a stronger economic union."

ON BANKING UNION AND SUPERVISION:

"It is very important that the summit now maintains the momentum of reforming the economic and monetary union including the banking union and, first of all, the single supervisory mechanism (SSM) for euro zone banks, which is related to direct bank recapitalization, which is critical to break the vicious circle between sovereigns and banks."

ON TIME-SCALE FOR BANKING SUPERVISION MECHANISM:

"I believe it is realistic to finish work on the SSM by the end of the year, it is a matter of political will. Now the political will of member states is tested. I trust there is the will. In fact, if the member states and (European) Parliament work as intensively in the coming weeks, as the European Commission worked during the summer break, then I am sure this work can be concluded by the end of the year.

"It is essential that all EU member states and the EU Commission stick to the commitment undertaken during the summit in June. It gives precise political guidance in that regard (on when the SSM should be ready), the entry into force and start of operation for the single supervisory mechanism for euro zone banks is a necessary, but not alone sufficient condition for direct recapitalization of banks."

(Reporting by Robin Emmott, Julien Toyer, Claire Davenport, Jan Strupczewski; editing by Rex Merrifield)

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