EU can deal with treaty change issue later: Eurogroup head

The euro zone can make progress on creating a banking union before having to take a decision on whether a change to the European Union treaty is necessary, the head of euro zone finance ministers said on Monday.

The 17 countries sharing the euro want to set up a banking union under which Europe's biggest banks will be supervised by the European Central Bank, there would be a single bank resolution mechanism and a common deposit guarantee scheme.

But the 2014 target for the single resolution scheme could be in jeopardy because Germany believes it will require a change to the EU treaty -- a lengthy and difficult process.

"Many of the building blocks for the banking union can be put in place. The issue of the treaty change can be addressed later on," Jeroen Dijsselbloem, the Eurogroup chairman, told reporters before the ministerial meeting.

"I think the Germans are putting forward understandable questions, which will have to be dealt with. But I don't see why that should stop us making progress on banking union," he said.

(Reporting By John O'Donnell, writing by Jan Strupczewski)