European leaders opened a two-day Brussels summit on Thursday with Angela Merkel, the German chancellor, facing stiff resistance to her plan to force structural reforms on the ailing economies of the eurozone.
The summit was preceded early on Thursday by EU finance ministers agreeing on a compromise on how to rescue weak eurozone banks, or close down rotten ones.
While ministers and senior EU officials hailed the accord as “revolutionary” and “historic”, the complicated deal, resisted by Germany, meant there would be no quick leap to a common eurozone system of bailing out bad banks.
Germany had resisted key elements of the bank resolution plans for 18 months, but yielded slightly by agreeing to phase in pooled responsibility for the eurozone over a decade from 2015.
It foiled French-led attempts to have the eurozone’s €500bn bailout fund serve as a “fiscal backstop” for winding up or recapitalising bad banks.
“We wanted a backstop,” said Pierre Moscovici, the French finance minister. “We are working on its definition, which will evolve over time.”
The German finance minister, Wolfgang Schäuble, said: “The final pillar for the banking union has been achieved.”
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