Banking union plan agreed by Eurozone chiefs

Julian Harris
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EUROZONE leaders thrashed out a deal over the timing of a new banking union last night, after a day of fierce protests in Greece marred negotiations taking place in Brussels.

Senior politicians from euro area states agreed on “the objective of completing the legal framework by the end of the year” with implementation “in the course of 2013.”

Germany had previously appeared to clash with some other key states such as France, due to its reluctance to hurry through the new measures.

The first day of the crunch EU summit – which continues today – was disturbed by violent anti-austerity demonstrations in Athens. Some troublemakers hurled objects at the police, who used teargas to disperse the crowd.

Almost 40,000 protesters marched in the Greek capital to complain to the EU. And the protests coincided with a ruling by the Council of Europe that reforms to Greek labour law were illegal because they violated workers’ rights, as trade unions had claimed.

Meanwhile in fellow crisis-struck Eurozone state Spain, yields fell during an auction of government debt.

Yields on 10-year Spanish debt exceeded 7.6 per cent in late July, but after yesterday’s auction the yield was 5.42 per cent, 8.5 basis points lower on the day and the lowest for more than six months.

However, a more worrying data release showed that Spanish households and companies defaulted on their debts in record numbers in August.

Loans that fell into arrears in August increased by €5.3bn (£4.3bn) from July, reaching €178bn according to the worrying figures, which were published by the Bank of Spain.