EU moves towards Banking Union but new meeting next week

(MENAFN- AFP) European Union finance ministers have made good progress towards a historic banking union, Germany said on Wednesday, but precise details need to be worked out at another meeting next week.

"We have come a long way ... it is important that we get an agreement this year," German Finance Minister Wolfgang Schaeuble told reporters after 14 hours of talks.

"We all agreed that the (member states) still need to check a few things and that precise details needed to be prepared so that we can make the final political accord ... next week."

Schaeuble said he thought ministers would meet again next Wednesday, the day before a two-day summit of EU leaders that will attempt to reach definite agreement on the subject.

"The decisive point is that we have the goal that if -- hopefully it will not happen -- banks get into difficulty, that it will not be the taxpayer but the investors and creditors that bear the costs," he said.

Ministers were trying to clinch agreement on a mechanism that can wind up failing banks with a financial backstop to prevent a crisis in the banking sector crippling the real economy -- as happened in Cyprus, Ireland and Spain.

But they clashed on the scope of this so-called Single Resolution Mechanism -- which banks should fall under its purview and how exactly it should be funded.

EU Financial Markets Commissioner Michel Barnier said there had been "decisive progress" but cautioned that the Banking Union still needed approval from the European Parliament.

Ministers are racing to clinch a deal by the end of the year in order to get these talks underway before parliamentary elections in May.