BERLIN – German Chancellor Angela Merkel hailed on Thursday an agreement clinched by EU finance ministers on giving the European Central Bank new powers to supervise euro zone banks and said Germany's core demands had been met.
The 27 ministers agreed early on Thursday after lengthy negotiations to grant the ECB the authority to directly police at least 150 of the euro zone's biggest banks and intervene in smaller ones at the first sign of trouble.
"The importance of the deal reached this night on the legal basis and main features of a supervisory mechanism for banks cannot be too highly assessed... We succeeded in securing Germany's key demands," Merkel told the lower house of parliament, the Bundestag.
"We will have a clear separation of responsibility for monetary policy and of the banking supervision," she said.
Germany had been concerned about a potential conflict of interest between the ECB's role as both supervisor and guardian of monetary policy. The deal sets up a mediation panel to resolve disputes with national supervisors.
Berlin also wanted to retain primary oversight over its many smaller savings and cooperative banks, most of which under the new accord will not come under direct ECB surveillance, unless they run into problems.
The new system of supervision should come into force on March 1, 2014, following talks with the European Parliament.
Merkel, who flies to Brussels later on Thursday for a summit of EU leaders, said she saw good chances for implementing a new tax on financial transactions involving 11 euro zone member countries.
The German leader also praised the reform efforts of Greece's new conservative-led government and said she expected euro zone finance ministers to approve on Thursday the payment of fresh loans to the crisis-ridden country.
Merkel said she expected the EU to emerge stronger from its sovereign debt crisis, which erupted in Greece three years ago and which has dominated her second term as German chancellor. She hopes to win a third term in elections next September.
But she said European politicians must show courage to implement the tough fiscal and structural reforms needed to put the continent's economy back on its feet.
"This courage to bring about change is what we need, and therefore I am convinced that Europe will manage to come out of this crisis stronger than it went into it," Merkel said.
"This is the great mission of our times."
(Reporting by Sarah Marsh, Gareth Jones and Madeline Chambers, writing by Gareth Jones)