EU talks on banking union end without agreement

Wednesday 05 December 2012 16.33
Olli Rehn said it was of fundamental importance agreement be reached by the end of the year
Olli Rehn said it was of fundamental importance agreement be reached by the end of the year

European Union finance ministers have failed to reach agreement on setting up a single supervisor for eurozone banks.

Germany and France clashed over the plans, seen as the first step in setting up a Europe-wide banking union.

Germany's Wolfgang Schaeuble raised concerns about the scope of ECB powers and reiterated his view that it was not reasonable to expect one institution to supervise all 6,000 European banks.

His French counterpart Pierre Moscovici said the position of France was "steadfast" in support of the proposals.

The setting up of a banking union will be key if Ireland is to secure a deal on legacy bank debt.

Cypriot finance minister Vassos Shiarly, who chaired the meeting, called for another gathering to be held on 12 December in the hope of striking a deal.

EU officials are anxious that an agreement is reached before the end of the year.

The plans are seen as central to Europe's response to the eurozone debt crisis and global financial crisis.

"It is of primordial importance that an agreement be reached by the end of the year," said EU economic affairs commissioner Olli Rehn. "It is a test that Europe cannot afford to fail."

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