BRUSSELS (Reuters) – The European Commission on Thursday gave France, Italy and nine other EU countries two months to adopt new EU rules on propping up failed banks or face legal action.
The rules, known as the bank recovery and resolution directive (BRRD), seek to shield taxpayers from having to bail out troubled lenders, forcing creditors and shareholders to contribute to the rescue in a process known as “bail-in”.
The Commission drafted the rules in response to the financial crisis which started in 2008, giving the 28 countries in the European Union until the end of last year to apply them.
It said Bulgaria, the Czech Republic, France, Italy, Lithuania, Luxembourg, the Netherlands, Malta, Poland, Romania and Sweden had yet to fall in line.
“If they don’t comply within two months, the Commission may decide to refer them to the EU Court of Justice,” the EU executive said in a statement, referring to Europe’s highest court based in Luxembourg.
(Reporting by Foo Yun Chee; editing by Adrian Croft)