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European Council President Herman Van Rompuy (L) shakes hands with France's President Francois Hollande during a European Union leaders summit in Brussels October 19, 2012. EU heads of states and government took a big stride towards establishing a single banking supervisor for the euro zone, striking a deal under which the bloc's rescue fund could start recapitalising ailing banks next year, a French government source said.
European Council President Herman Van Rompuy (L) shakes hands with France's President Francois Hollande during a European Union leaders summit in Brussels October 19, 2012. EU heads of states and government took a big stride towards establishing a single banking supervisor for the euro zone, striking a deal under which the bloc's rescue fund could start recapitalising ailing banks next year, a French government source said.
(Sebastien Pirlet/Reuters)

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EU bank supervisor isn’t a pipe dream anymore

Mañana works both ways. Spain has procrastinated over calling for a sovereign bailout. But investors are learning that the real meaning of mañana – especially with regard to the bank rescue Spain needs – is not so much tomorrow as some time in the future. How frustrating for Spain that full implementation of EU leaders’ agreement to create a single banking supervisor under the aegis of the European Central Bank – a key precondition of a direct bailout of Spanish banks – could take a year. For now, any amount Madrid borrows for the required €60-billion ($77.7-billion) capital injection will add to its sovereign debt pile. Still, last week’s agreement marks progress – even if Germany is resisting a decision on when the €500-billion European Stability Mechanism cash can be drawn down.