Cypriot Finance Minister Vassos Shiarly (L), Spanish Finance Minister Luis De Guindos (C) and Portuguese Finance Minister Vitor Gaspar (R) talk prior an ECOFIN Council on December 12, 2012, at the EU Headquarters in Brussels. (Getty Images)
Eurozone leaders agreed Thursday to begin laying the groundwork for a full-fledged banking union and to give Greece yet another bailout. The measures, approved by European finance ministers, ended weeks of haggling over ways to deal with the three-year financial crisis.
"Europe and the eurozone have proved that they are capable of eliminating the challenges that confront them," said France’s socialist President Francois Hollande.
A meeting of the 17 finance ministers from the EU countries that use the euro agreed early Thursday that Greece would get a total of €49.1 billion ($64 billion) between now and March, with €34.3 billion due in the coming days.
The approval of funds for Greece opens "the way for a return of confidence of investment, of growth and job creation," said Olli Rehn, the European commissioner for monetary affairs.
The gathering of eurozone ministers came just hours after a pre-dawn meeting of finance ministers from all 27 EU countries, including non-euro countries such as Britain and Poland, agreed to create a single supervisor for the region's banks.
Yes, a single supervisor for all of the banks.
It was a key component of what many hope will eventually become a full-fledged banking union -- a single rulebook for all banks and coordinated plans for helping lenders in trouble. Crucially, the single supervisor paves the way for Europe's bailout fund to give money directly to struggling banks, without dragging governments into the mess.
"Piece by piece, brick by brick, the banking union will be built on this first fundamental step today," said Michel Barnier, the EU Commissioner responsible for the monitoring of financial markets.
Providing it is approved by the European Parliament early next year, the European Central Bank will take on the single supervisory role. The ECB will have direct oversight for the largest and most significant banks in the eurozone and any other country in the EU that wants to opt in. It will also direct national authorities in supervising smaller lenders.
"The crisis came by way of the banks and now a tool is in place so that nothing will be like it was before," declared Hollande on his way into Thursday's summit.
German Chancellor Angela Merkel said the creation of the supervisor was "a big step toward more reliability and confidence in the eurozone." After months of haggling, a compromise between France and Germany paved the way for the agreement on the supervisor.
Greece has been one of the biggest casualties of the European financial crisis which has left it dependent on funds from international rescue loans for the past two and a half years. The country had to commit to further austerity measures, which hasn’t helped keep it out of recession.
Figures released Thursday from the Greece's statistics office showed unemployment at a record high of 24.8 percent in the third quarter of 2012, compared with 17.7 percent in the same period a year ago.
"It is a big success for Greece; it's a big success for Europe," said Greek Prime Minister Antonis Samaras.
Exit Question(s): A single banking authority? Quis custodiet ipsos custodes?
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The Associates Press contributed to this report. Featured image YouTube