EU leaders have arrived for their last Brussels summit of the year, hours after finance ministers agreed to give the European Central Bank new supervision powers over national lenders.
Within two years, the ECB will oversee up to 200 of the eurozone’s largest banks. The proposals aim to allow the ECB to intervene directly if banks get into trouble without the need for direct bailouts from individual European nations.
Leaders will rubber stamp the proposals and discuss plans for even closer fiscal ties over the next two days.
German Chancellor Angela Merkel lauded the deal as she arrived for the talks: “We have lot of things to do. Of course banking supervision (is one of them) so that it can start working in 2014. And most of all the coordination of economic policies in order to strengthen the competitiveness of the eurozone.”
But critics say the banking agreement is just one step down a tricky path and that plans to move control over national budgets to Brussels are likely to face stiff resistance.
Also ahead of the summit, the next 34 billion euro tranche of bailout cash for Greece was approved by finance ministers, averting a crippling default.
Jean-Claude Juncker, President of the 17 eurozone finance ministers that make up Eurogroup, said: “This has been a week of tangible decisions. We’ve been able to agree on a solution for banking supervision and we made the final decision on the aid package for Greece. These are two decisions that the media predicted we would not be able to achieve successfully.”