EC pushes for region-wide bank union

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BRUSSELS, May 30 (UPI) -- The European Commission on Wednesday proposed creation of a common backstop for banking problems, including joint protection of deposits.

In calling for a region-wide "banking union," EC President Jose Manuel Barroso said, "For full confidence in the future of the euro area, it is important that member states agree to launch a process toward more integration -- financial and economic."

He said conditions in the Spanish banking sector had heightened the need for further international cooperation, The New York Times reported.

The Wall Street Journal said the EC would also push for creation of region-wide euro bonds.

The commission also issued a comprehensive review of the European Union's finances, country by country, and said 12 member states out of 27 warranted further economic reviews.

The commission warned Belgium, Bulgaria, Cyprus, Denmark, Finland, France, Italy, Hungary, Slovenia, Spain, Sweden and Britain that their fiscal positions were out of balance.

Spain and Cyprus were noted as having "very serious imbalances," while France, Italy, Hungary and Slovenia were tagged as having "serious imbalances."

Problems in Belgium, Bulgaria, Denmark, Finland, Sweden and Britain were seen as milder, but the commission noted Greece, Portugal, Ireland and Romania were "already under enhanced economic surveillance."