The European Commission formally asked 10 EU countries yesterday to fully implement a 2014 law on national bank deposit guarantees that must be in place before the bloc can move towards a new, pan-European deposit guarantee scheme.

The Commission asked Belgium, Cyprus, Estonia, Greece, Italy, Luxembourg, Poland, Romania, Slovenia and Sweden to transpose into national law the Deposit Guarantee Schemes Directive, which all EU countries should have done by July 3.

The formal request is the first step in a legal procedure which will end in the Commission suing these countries in the EU’s highest court if they do not take action within two months.

The law improves the protection of deposits compared to a law from 1994 – depositors get their money back faster from national deposit guarantee funds that have to be pre-funded, rather than filled by governments only when a crisis happens.

For EU countries that are part of the EU’s banking union – now the 19 countries sharing the euro – the transposition of the EU law is a must if they want to become part of the European Deposit Insurance Scheme, now in preparation.