March 12 - European ministers have agreed to strengthen a scheme to tackle troubled banks. But as they seek to win the approval of EU lawmakers key questions remain. Ciara Sutton reports.
Italy's biggest bank is getting smaller. UniCredit is cutting eight and a half thousand jobs after reporting a record 14 billion euro loss. It's all down to bad loans last year - and it's the sort of problem a European banking union is supposed to prevent. UniCredit is likely to be near the top of the regulators list of lenders in line for a health check later this year. European finance ministers say they've now agreed to strengthen a scheme to tackle problem banks. But it still needs official approval and key questions remain - not least, how willing countries will be to help each other tackle problems? CMC's Michael Hewson. (SOUNDBITE) (English) CMC MARKET ANALYST, MICHAEL HEWSON, SAYING: "They haven't dealt with the legacy of the current crisis. It's all very well putting in place measures to deal with the next crisis but you have to deal with the current crisis and at the moment they haven't dealt with that and until such times as they do it's going to be very very difficult to move forward.". The ECB will become chief bank supervisor in November. An agency will also be created to winddown failing banks and a fund set up to cover the cost of cleaning them up. But there are still differences of focus between key euro zone countries. France and Spain see banking union as a step towards sharing risks. Berlin's more interested in creditors - instead of tax payers - picking up any bills. German finance minister Wolfgang Schaeuble. (SOUNDBITE) (German) GERMAN FINANCE MINISTER WOLFGANG SCHAEUBLE, SAYING: "It's clear that the bail-in rules apply. They can't be weakened because it makes no sense to constantly talk about the taxpayer no longer having to foot the bill and then to begin not applying the rules about owners and creditors taking the risk at the start." The rules are due to come into force in 2016. But even that isn't certain. Germany would rather they were introduced in the euro zone when the ECB takes on regulation. That would mean less time for struggling banks to get their houses in order ahead of the medical. Either way time to decide is running out. The European Parliament will be disbanded within weeks, ahead of elections in May.