BRUSSELS French President Francois Hollande called on Friday for like-minded EU countries to push ahead with further, deeper integration, even if it means leaving behind more Eurosceptic states which insist on protecting sovereignty.
Speaking after a two-day summit on the debt crisis where the 17 states that share the euro agreed on arrangements for a single supervisory system for their banks, Hollande indicated that a two-speed European Union was all but inevitable.
Britain and other non-euro states such as Sweden and the Czech Republic are determined to stay out of the banking union.
Under EU rules, groups of countries can already push ahead via so-called "enhanced cooperation" on specific policies, something which until now has only been used on areas such as a planned financial transaction tax, divorce and patent law.
"There is the possibility for those who want to go further, to do more, for those that want to find new resources and means to organize themselves - so yes, I would plead that from 2014 we go further with enhanced cooperation," he told a news briefing.
Germany holds a national election in late 2013 and under the rough timetable set out by EU leaders at the summit, 2014 is the year in which the bloc pushes ahead with more ambitious measures to deepen economic and ultimately political union.
"No country should be excluded (from greater integration) but at the same time no country should be forced into it either," Hollande said when asked about Britain's case.
But he added: "The Europe we have is not a Europe which can be stripped of its existing competencies."
Separately, British Prime Minister David Cameron, much of whose Conservative Party is Eurosceptic, suggested the push towards greater integration among the 17 euro states would allow Britain to loosen or at least modify its ties to the bloc.
"The existence of the euro is driving change in Europe, it is driving countries that are inside the euro to integrate more, to coordinate more," he told reporters.
"It will lead to opportunities for us in the UK to make changes in our relationship with the European Union that will suit us better, which the British people will feel more comfortable about."
That is likely to include withdrawing from large parts of justice and policing legislation, as well as taking a hard line on how far it is willing to cooperate on sharing risk and oversight in finance and banking, two traditionally powerful sectors of the British economy.
(Reporting by Mark John, Emmanuel Jarry and Sebastian Mofett in Brussels; editing by Luke Baker)