EconomyEurope

European Central Bank to supervise eurozone banks

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Members of the European Parliament have overwhelmingly passed a new bill allowing the European Central Bank (ECB) to supervise all the eurozone banks in an attempt to form a single banking framework for its members.

The vote, approved on Thursday, includes measures aimed at authorizing the Bank in Germany’s Frankfurt to monitor around 6,000 banks across the eurozone.

Following Thursday’s vote, the president of the European Central Bank, Mario Draghi, said that “Today marks a real step forward in setting up a banking union.”

Moreover, European Commission President Jose Manuel Barroso said, “The single supervisory mechanism is a lynchpin of a deeper economic and monetary union. Now our attention must turn urgently to the single resolution mechanism.”

Germany, Europe’s biggest economy, did its best to restrict the supervision and limit plans initiated by the European Commission for an independent authority, saying that the measures are against the laws of the European Union.

Despite the European Parliament vote, there are serious worries that the eurozone debt crisis – which has already resulted in bailouts for Greece, Ireland and Portugal – could also hit the far-larger economies in the European Union.

The worsening debt crisis has forced the EU governments to adopt harsh austerity measures and tough economic reforms, triggering incidents of social unrest and massive protests in many European countries.

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