European leaders have gathered for day two of their summit in Brussels after a marathon session that ended up with a big step towards banking union in the euro zone.
In the early hours France and Germany overcame their differences and agreed to set up a single supervisory body to oversee all euro zone banks.
French president Francois Hollande said: “There was a deal last night, a good agreement, on timetables, taking all banks into account with the will to establish a mechanism. It’s a good agreement, and must be seen as such.”
Hollande also told reporters that the worst of the euro zone debt crisis is now in the past.
The International Monetary Fund reckons an effective banking union is central to overcoming the three year old crisis.
Countries outside the eurozone, particularly Britain with the biggest banking sector in Europe, are concerned that their banks might be at a disadvantage unless there is a balance between the euro zone’s overseer and the authorities that supervise other European banks.
Leaders also released a statement on Greece, welcoming the government’s progress towards and agreement with its lenders.