* Commission may propose supervision rules in Autumn
* EU leaders explore deeper integration
* Britain will not join any banking union
By John O'Donnell and Luke Baker
BRUSSELS, June 13 The EU executive could make
proposals this autumn to integrate supervision of banks, the
head of the bloc's executive said on Wednesday, outlining a key
step towards a banking union to underpin the euro zone's
Jose Manuel Barroso, President of the European Commission,
said that it could present legislative proposals to integrate
Officials expect this to include strengthening the European
Banking Authority, the EU's fledgling supervisor.
"By Autumn the Commission could be ready to come with key
proposals to introduce more integrated banking supervision and
common deposit guarantee and resolution funds," Barroso told
lawmakers in the European Parliament.
EU leaders will discuss establishing closer ties at a summit
scheduled for June 28-29, and a draft statement prepared for
them to deliver after they meet underscored the need for banking
and fiscal integration.
"There is a need for more specific building blocks centred
around a much stronger banking and fiscal integration,
underpinned by enhanced euro governance," said the text,
obtained by Reuters. "Recent developments have demonstrated the
need to take the EMU (Economic and Monetary Union) to a further
However, steps towards such integration are politically
difficult. They could include the creation of a so-called
banking union to centralise control of big European banks and EU
funds to wind down problem lenders or reimburse depositors.
Britain is opposed to signing up to such schemes for fear of
losing autonomy over the City of London, Europe's biggest
financial centre. Earlier this week, Britain's financial
services minister Mark Hoban said it would not join any such
"People in Brussels understand that we won't be part of it
but that we support a banking union for the euro zone," said one
Barroso signalled that even were some countries to reject
such schemes, others should press ahead. As well as a likely
British opt-out from a banking scheme, opposition from states
including Germany have so far hindered the creation of single EU
fund to protect depositors or cover the costs of closing banks.
"We must recognise that some countries do have opt-outs.
These opt-outs must be taken into appropriate account in the
future architecture," Barroso said.
"Those who wish to advance must be able to do so," he said.
"But enhanced cooperation or properly circumscribed derogations
can allow for this without creating a risk for the integrity of
the European Union."
Barroso, alongside European Central Bank President Mario
Draghi, Eurogroup Chairman Jean-Claude Juncker and European
Council President Herman Van Rompuy have been given the task of
reporting to the summit on closer euro zone integration.
"The report commissioned ... on steps towards a full
economic and monetary union will set out the main blocks, some
concerning all the member states of the Union, others only the
members of the euro area and, as appropriate, others willing to
join," said the draft conclusions prepared for the 27 leaders.
Moving towards a single chief EU supervisor may take time,
said Nicolas Veron, an expert in financial policy with Brussels
think tank Bruegel.
"It took more than a century to move from purely state banks
to a national banking system in the U.S.," said Veron. "You
won't be able to centralise everything over night in Europe."