Eurozone FinMins fail to reach agreement on banking union (Barcelona) - A clash between France and Germany over banking supervision in the Eurozone prevented the Eurogroup from reaching an agreement on the EU banking union on Tuesday. EU finance ministers decided to hold an additional meeting on December 12, just ahead of the EU summit on December 13, by which time a deal on the banking union needs to be made.

France and Germany are divided over the scope of ECB's powers as the Eurozone bank supervisor. France pushes for a solution in which the central bank would regulate all the financial institutions in the region, while Germany would like smaller banks to be excluded from this supervision. Berlin is also not too keen on seeing a full banking union formed that quickly, as it fears it will be obliged to pay for potential future banking losses in other Member States. 

German finance minister Wolfgang Schäuble commented on France's proposition saying that there was no possibility for the central bank to supervise so many financial institutions, while his French counterpart Pierre Moscovici stated that the EU cannot introduce a system of dual supervision.

"We have no mandate for a dual system of supervision which would call into question the existence of a single system for some banks," the French finance minister argued.

At the close of the meeting Wolfgang Schäuble said that changes to the EU treaty might be necessary, which would mean that implementation of the the banking union would be delayed even by several years.

Earlier on Tuesday, at the beginning of the second day of the meeting, Luxembourg's Prime Minister Jean-Claude Juncker announced that he would step down as chair of the Eurogroup at the end of December. Wolfgang Schäuble and Pierre Moscovici are the most possible successors for the post.