Mr Barroso outlined the EC's proposal for a banking union last week Courtesy of the European Parliament

After the European Commission revealed proposals last week to give the European Central Bank supervisory powers over euro zone banks, Poland’s government remained non-committal, reluctant to voice its approval of a plan that could place Warsaw on the outside looking in.

In a speech to the European Parliament last week, Jose Manuel Barroso, president of the European Commission, called the proposals “a major step to a banking union.”

Specifically, the EC wants to give the ECB supervisory power over all banks in the euro zone, “with a mechanism for non-euro countries to join on a voluntary basis,” the EU executive said in a statement.

Precisely how that mechanism will work is unclear, and Poland is keen to avoid a situation where it gives up supervision of its banks to a body in which it has no direct say. Poland’s Finance Ministry issued a statement saying it was too early to decide Poland’s stance on the union until it sees “all the details of the plans for the euro zone banks.”

According to the proposal, ultimate responsibility for supervisory tasks related to the financial stability of all euro zone banks will lie with the ECB, although national supervisors will continue to play an “important role” in preparing and implementing ECB decisions, the EC’s statement said.

Under the EC’s proposal, the ECB would be able to decide to assume full supervisory responsibility over any credit institution, particularly those which have received or requested public funding, at the start of next year. By July 1, 2013 all banks of major systemic importance would be put under the supervision of the ECB. The phasing-in period would be completed by January 1, 2014, bringing all banks within the system under ECB supervision.

Catch the train?

EU Budget Commissioner Janusz Lewandowski, a Pole, told journalists last week that Poland has before it “a very important strategic choice” of whether or not to join the banking union, adding that Warsaw would have to decide before the year runs out.

Mr Lewandowski said that countries outside the euro zone would only be allowed to “cooperate closely” with the banking union but would not count as full-fledged members. He questioned whether such guarantees would be “enough” to convince countries to join the banking union while giving up domestic supervision.

But he added that the “euro zone train will be leaving,” and said that staying outside the banking union “could worsen the external perception of the Polish banking system.”

Poland’s Finance Ministry said in its statement that “if Poland does not join the new system fully, it will not weaken our position in the EU,” but that it would do everything in its power to have an “influence on decisions taken in the unified structure, which could have an indirect influence on countries outside the EBC supervision.”