BRUSSELS, Dec. 15 (UPI) -- European Union leaders concluded their final meeting of the year with an outline of where the eurozone might further integrate its financial system.
"We agreed a road map for the future development of the currency union and talked about different aspects of this that are important. Above all, it was important to define when we do what," said German Chancellor Angela Merkel at a news conference Friday after the two-day summit.
The plan includes European Union Chairman Herman Van Rompuy penciling in details that would be ready for discussion at a June 2013 summit, the BBC reported Saturday.
Having agreed that banks with over $39 billion in assets would be regulated by the European Central Bank and smaller banks in trouble would be subject to ECB oversight, leaders at the summit agreed to allow the European Stability Mechanism to grant bailout funding that would go directly to banks, rather than to governments, where the aid would add to that country's sovereign debt.
Spain has pressed hard to keep financial rescue efforts from ending up on its government balance sheets, which only puts them in a deeper financial hole.
Merkel said the new funding flexibility would still be accompanies by mandates for strict fiscal discipline.
The road map, with details to be determined later, include stringent fiscal measures that would come with penalties for country's that let debt go beyond agreed upon targets and further coordination of tax and labor laws. There would also be plans, through the ECB, on how to wind down troubled banks.
In effect, there would also be more scrutiny of national budgets done by the European Commission.
"There is no doubt today about the integrity of the eurozone - Europe cannot now be taken by surprise," said French President Francois Hollande.
The changes were embraced by British Prime Minister David Cameron, who also acknowledged that Britain, as a financial center, need to keep up with its neighbors.
"As this plays out it's changing the European Union ... so I believe there are opportunities for others, like Britain, to make changes themselves," he said.
The Wall Street Journal reported Merkel also sounded a note of caution.
"The political burdens from this transformation process will still be felt next year and, perhaps, beyond. A lot has been done, but there is still a difficult time ahead of us which we cannot resolve with just one fell swoop or single measure. So, we can't let up in our reform zeal," she said.
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