The European Commission President has outlined his vision for the banking sector, in which the European Central Bank would be given supervisory powers over all banks in the union.

Delivering a State of the Union address to the European Parliament, José Manuel Barroso detailed proposals for a single bank supervision regime covering some 6,000 European banks.

The plan is a cornerstone of moves towards closer fiscal integration, which EU leaders hope will end years of financial and economic turmoil in the region.

It would require the approval of all member states, however, with tensions already arising between Germany and Britain over the issue.

Germany’s Finance Minister Wolfgang Schaeuble has argued that the ECB should only supervise big banks, who could pose a systemic risk to the financial system.

However, this was dismissed by Mr Barroso.

A single banking supervisory mechanism is of major significance to Ireland because such a supervisor has to be in place before the Government can secure a deal on reducing bank debt.

Minister for Finance Michael Noonan is touring three European capitals today to attempt to garner political support for such a deal.

He arrived in Paris this morning to meet his French counterpart before flying to Berlin and then on to Rome.

EU needs to move towards federation - Barroso

As part of his address to the Parliament, Mr Barroso said the EU needs to evolve and move towards a "federation of nation states".

Such a federation would ultimately need a new treaty, he added.

He said that before the 2014 European Parliament elections the EC would present an outline on the future of Europe, which would set out ideas for treaty changes.

Mr Barroso also said he truly believes there is a chance to come to a turning point regarding Greece this autumn if the country can banish doubts on its commitment to reform.

In a sharp rebuke to EU governments, he criticised responses to the eurozone crisis and a call for greater solidarity.

He warned MEPs that it is time to put a stop to what he termed piece-meal actions and muddling through.

He told MEPs that states had too often backtracked on decisions taken at EU summits, adding that it was not acceptable to present such meetings as "boxing events" with winners and losers

Mr Barroso said time and time again, Europe had allowed doubts to spread.