video transcript

(ROUGH CUT ONLY - NO REPORTER NARRATION) The proposed banking union foresees three steps: the ECB firstly getting the power to monitor all euro zone banks and others in the wider European Union that agree to the oversight; the establishment of a fund to close troubled banks; and a fully fledged scheme to protect citizens' deposits across the euro zone. Jose Manuel Barroso also called for the European Union to be turned into a 'federation of nation states' in a sweeping demand for countries to surrender more sovereignty and move towards full integration. (SOUNDBITE) (English) EUROPEAN COMMISSION PRESIDENT, JOSE MANUEL BARROSO, SAYING: "We need to move to common supervisory decisions namely within the Euro area. The single supervisory mechanism proposed today will create a reinforced architecture, with a core role for the European Central Bank and the proper articulation with the banking authority, which should restore confidence in the supervision of the banks in the euro area . It will be a supervision for all euro area banks. Supervision must be able to look everywhere because systemic risks can be anywhere." "A political union with a coherent foreign and defence policy means ultimately that the present European Union must evolve. And let's not be afraid of the words. We will need to move toward a federation of nation states. This is what we need." "A deep and genuine monetary union can be started under the current treaties and can only be completed with changes to the treaties. So let's start it now but let's have the horizon for the future present in our decisions of today."