EU finance ministers struggled today to nail down a final deal on a "Banking Union" handing Brussels unprecedented new powers to prevent failing banks from wrecking the economy.
The Banking Union regulatory framework was drawn up in response to the financial and then debt crises which brought down banks, driving the eurozone to its knees as governments tried and in some cases failed to keep their lenders afloat.
The new emerging framework involves a big pooling of sovereignty and would mark a big step for EU cross-border institutional authority.
Determined to prevent a repetition, the European Union aims to put in place a system with firstly a Single Supervisory Mechanism to police the banks, giving a new key role to the European Central Bank.
The already agreed SSM will work with a Single Resolution Mechanism -- one of the main sticking points at the talks -- which will stabilise, and if necessary close a failing bank.
The SRM will be backed up by its own fund -- another bone of contention -- to be paid for by bank contributions and which will cover the cost of closures.
Combined, the system is meant to ensure that taxpayers no longer have to foot the bill for banks which get into trouble through taking on too much risk.
Finance ministers from the 28-country bloc arrived on Wednesday positive that they can clinch an overall deal, citing progress at a late-night meeting of the eurozone.
A deal with the European parliament on a deposit guarantee scheme to protect savers -- the third pillar of Banking Union -- also boosted morale.
"There are some issues open but I think we'll be able today to make a deal, a fair deal, a deal that can be put before the European parliament," said Lithuanian Finance Minister Rimantas Sadzius, whose country holds the rotating presidency of the EU.
French Finance Minister Pierre Moscovici was equally upbeat, saying, "Tonight, we will leave, I am certain, with a decisive agreement, a historic agreement."
Eurogroup chief Jeroen Dijsselbloem said, "The outline of compromise on all these issues are beginning to come clear.
