HELSINKI – The EU's top economics official, Olli Rehn, said on Friday that it was important that European leaders meeting in Brussels next week reach an agreement on plans for pan-EU banking supervision.
European finance ministers and leaders meet later next week to try to bridge their differences over how to supervise banks around the European Union in the wake of the global financial and euro zone debt crises.
"We have serious flaws, serious holes in European banking supervision and we aim to fill those holes and prevent a similar crisis from happening again," Rehn told reporters in Helsinki after a parliament briefing.
He also said the European Central Bank's economic forecasts on Thursday "should work as an alarm that now determined decisions must be made both in member countries and in the euro area."
The European Central Bank's new staff projections on Thursday put gross domestic product in a range of falling by 0.9 percent to growing just 0.3 percent in 2013, suggesting contraction is far more likely than not.
"Recovery will be slower than previously forecast. Whether the recovery will begin in the second or third quarter is difficult to say, but it will begin next year," Rehn said, though he added that the worst of the crisis was over.
He also said that Greece's program and its bond buying will be discussed by European finance ministers next week, but declined to say what would be a target figure for Greece's bond buyback plan.
Last week Greece and its international lenders reached a deal to lower the country's debt burden, which included a debt buyback. The move is seen as central to put the near-bankrupt country's debt back on a sustainable footing.
"We will review its impact on last week's decisions on Greece during the weekend and early next week," he said.
(Reporting By Terhi Kinnunen, Writing by Jussi Rosendahl; Editing by Hugh Lawson)