EU finance ministers seek 'vital' banking union accord

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EU finance ministers seek 'vital' banking union accord

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What measures to take to supervise Europe’s banks? Wind them up when they are no longer working, and stop them from dragging whole countries into the mire?

European finance ministers will tackle the thorny questions again on Wednesday ahead of a full European summit.

Their goal is to reach agreement on a banking union its backers say Europe’s economy badly needs.

“Without the banking union there cannot be an end to the economic crisis of today, because there is no trust between the banks for the moment in Europe, and the transfer of money between the banks and the real economy is blocked for the moment. So the banking union is the first thing to do,” said Belgian former prime minister Guy Verhofstadt, now leader of the Alliance of Liberals and Democrats for Europe in the European Parliament.

The UK will not be part of the banking union but it wants those outside the eurozone to have a say in how it works – an uphill task perhaps amid closer single currency integration.

Other critics fear this week’s Brussels summit will be a missed opportunity.

“Essentially it will just be hot air. Because the important issues will not be on the table. Six months ago we were promised this summit would tackle tax evasion and tax dumping (where some countries undercut others’ tax rates unfairly). But these disappeared from the agenda. And the big plan on the eurozone has also been dropped,” said German MEP Sven Giegold from the Green group.

A key question concerns Germany’s position on sharing risk and supporting weaker economies.

The French and others may hope Angela Merkel’s new Social Democrat coalition partners manage to soften her stance.