Page last updated at 14:52 GMT, Monday, 17 December 2012

European Council debate

The president of the European Council, Herman van Rompuy, has welcomed an agreement by EU leaders towards further integration of the eurozone.

Reporting back to MEPs on the recent Brussels summit of EU leaders, he said it signified a "good week" for Europe.

Integration is expected to be achieved by closer scrutiny of national budgets, including penalties if governments rack up unsustainable debts.

He said that further integration would go some way towards preventing a repeat of the sovereign debt crisis that has plagued the eurozone.

"Some member states were badly governed for years and took too long to act," he said of the existing system.

The summit also saw final agreement on the new banking supervisory mechanism, which will give the European Central Bank oversight for the biggest banks in the eurozone.

As part of a compromise between the French and German government, the ECB will have oversight for banks with more than €30bn in assets, although the ECB will also be able to intervene with smaller lenders and borrowers at the first signs of trouble.

Joseph Daul, the leader of the European People's Party, said the plans on banking supervision did not go far enough.

"We must go even further than a single supervisory mechanism for banking. Otherwise we might discover holes in the web we have woven - holes through which some banks - precisely those that should have been supervised - might just slip through," he warned.

SEE ALSO

Story Tools

BBC navigation

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific