European parliament has voted to adopt three key texts paving the way for a completed banking union to ensure that failing banks are tackled at the EU level.
But while internal market and services commissioner Michel Barnier praised the EU for having "living up to its commitments", GUE/NGL deputy Marisa Matias has strongly criticised the package saying that it has "fallen far short of what was promised".
Speaking during the debate in plenary, the Portuguese deputy said, "When the financial crisis erupted, European and world leaders came out with multiple statements denying the deregulation of financial markets that caused it.
"All made commitments that severe measures would be taken to ensure that a crisis of this size could not happen again. 26 percent of European GDP was used to save the banking system. Yet six years later, any reforms have been implemented at a snail's pace and have fallen far short of what was promised."
"The banking union package is a classic example of... a broken promise" - Marisa Matias
She continued, "The banking union package is a classic example of such a broken promise. It proposes the creation of a European 'super central bank', which will set monetary policy and act as supervisor.
"The result is that the [European central bank] is now the most powerful non-democratic institution in the world.
"The only good news contained in the package is the creation of a European resolution fund - but that won't happen for another eight years. Eight years during which much can go wrong and many may change their mind," she warned.
However, Barnier welcomed the agreement saying, "Today, the European parliament has adopted three key texts (single resolution mechanism, bank recovery and resolution directive, and deposit guarantee schemes directive) to complete the legislative work underpinning the banking union.
"Thanks to the assiduous work of the co-legislators, we have turned the idea of a banking union into reality in less than two years.
"The EU has lived up to its commitments: the banking union completes the economic and monetary union" - Michel Barnier
The French official went on, "The EU has lived up to its commitments: the banking union completes the economic and monetary union, puts an end to the era of massive bail-outs and ensures taxpayers will no longer foot the bill when banks face difficulties.
"Not only does the banking union help to restore confidence in the banking sector, but it also ensures a truly European system of supervision and resolution of banks when they fail. With today's vote, we remain on track for the operational work to start later this year."
S&D MEP Elisa Ferreira, one of parliament's rapporteurs on the dossier, explained, "The banking union will give the eurozone a way to detect fire risks in the banking sector and the tools to put out the flames in case fire breaks out. The European system will be designed so that taxpayers’ money is protected by making sure banks will be the first in line to pay for their own mistakes.
"The banking union will give the eurozone a way to detect fire risks in the banking sector and the tools to put out the flames in case fire breaks out" - Elisa Ferreira
"It will also protect depositors against speculation and banking failure. In 2008 following the collapse of Lehman Brothers, the EU did not have that kind of power so €4500bn of public money was injected to rescue the European banking sector.
"Achieving the banking union will help Europe get out of the crisis by preventing the irresponsible behaviour of an unregulated banking sector and the excessive costs paid by citizens," concluded Ferreira.
The outcome was also welcomed by parliament's EPP group, with Corien Wortmann-Kool saying, "The banking union will contribute to regaining trust in the banking sector and thereby to economic recovery in the EU.
"These rules on financial stability will help restore banks' ability to provide credit to the real economy and our SMEs.
"This is an important lesson we have learned from the crisis: shareholders and creditors must bear the losses of failing banks, not taxpayers.
"The position concluded by the finance ministers in December was not ambitious enough, leading to more involvement of member states in individual resolution cases," explained the Dutch deputy.
"The European parliament successfully managed to reduce this political interference. This ensures that banks are treated in the same way across Europe and that painful, but necessary, restructuring measures such as bail-ins are really put into practice," Wortmann-Kool added.
Greens economic and finance spokesperson Sven Giegold, meanwhile, said, "The systems being set in place today represent a step forward for the creation of a coherent and effective European approach to dealing with the banking sector, ensuring the lessons of the financial crisis and the massive continent-wide problems of bank failures have been learned.
"However," he continued, "The insistence of EU governments that core elements of the new banking resolution system be dealt with through an intergovernmental agreement, as opposed to EU law, casts a long shadow over the achievement.
"There are doubts about the legal soundness of this intergovernmental approach and the Greens will thoroughly evaluate all legal options to avoid a precedent.
"The banking union is not yet completed. The EU now needs to move forward as soon as possible with a view to completing the financial transaction tax and the separation of bank activities in order to deal with the problem of too-big-to-fail banks," he conluded.