European Union agrees deal on banking union

(Vatican Radio) The European Union, after months of negotiations, agreed on Thursday to create a single supervisor for their banks. `'Piece by piece, brick by brick, the banking union will be built on this first fundamental step,'' Those were the words of EU Commissioner Michel Barnier as it was announced on Thursday that European nations had agreed on a Eurozone banking union.

The deal was struck at dawn by finance ministers ahead just ahead of an EU summit in Brussels.

The agreement will make the European Central Bank or ECB the supervisor for banks in the 17 EU countries that use the euro and any other country in the union that wants to opt in.

Under the deal the ECB has the power financially sanction banks that don’t follow rules. It also paves the way for eurozone rescue funds to come to the aid of banks in trouble.

In addition, banks with more than 30billion euro in assets will be placed under the oversight of the European Central Bank.

The deal still has to be approved by parliament. Listen to Lydia O’Kane’s report