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Sharp divisions over banking union before EU summit | |
(about 1 hour later) | |
EU states are sharply divided over plans for banking union as their leaders gather in Brussels for a two-day summit. | |
The aim is to agree first on joint banking supervision, with the European Central Bank playing the lead role. | |
But the UK - the EU's main financial centre - wants safeguards to protect the powers of the Bank of England. | |
It and the other nine non-euro states are also concerned about voting rights in the proposed banking union. | |
German Chancellor Angela Merkel has called for the EU to be given clear rights to intervene when member states' national budgets violate the bloc's rules. | |
| The EU's economics commissioner should have the authority to declare a budget "invalid", she told the German parliament in Berlin on Thursday morning. |
Her government has proposed a full fiscal union with control at European level of tax and spending. | |
Meanwhile in Greece, the eurozone state worst hit by the debt crisis, a new general strike is getting under way. | |
'Quality before speed' | |
The summit is taking place amid calmer European stock markets than at previous meetings and with less concern over the debt crises in Spain and Greece, analysts say. | |
However, the banking union proposal has brought urgency to the talks, with the EU's executive Commission, the ECB and several states including Spain and France wanting its legal basis to be in place by January. | |
Germany, while advocating greater fiscal control, is urging caution, with Mrs Merkel repeatedly stressing that "quality must trump speed". | |
A top German official, who spoke to the Associated Press news agency on condition of anonymity, said many "legal, technical and political details" for a supervisory authority had still to be hammered out. | |
On Wednesday, German Finance Minister Wolfgang Schaeuble said eurozone countries "need to tackle problems themselves", adding that the eurozone bailout fund was there to help countries do just that. | |
But he reiterated his view that further steps towards political integration would strengthen the bloc. | But he reiterated his view that further steps towards political integration would strengthen the bloc. |
While the 17 eurozone states largely support the proposal for a banking union, the remaining 10 are uneasy that their banks might face new regulation without their say-so. | |
The BBC's Gavin Hewitt says little will be agreed at the summit. | |
It is the fourth time that the leaders of the EU's 27 nations have met this year. | |
Other business expected to come up at the summit includes relations with China and the situation in Syria, Iran and Mali. | |