Bundesbank opposes European banking union

Germany's Bundesbank yesterday poured cold water over the idea of a pan-European banking union, which some have touted as a solution to the eurozone sovereign debt crisis.

The vice-president of Germany's central bank, Sabine Lautenschlaeger, said such a union would result in taxpayers in some countries paying for the mistakes of others.

"In a banking union, a crisis in one country's banking system may require the use of taxpayer money from other countries," she said. "Whoever is footing the bill must also have the right of control, particularly when it comes to the large sums that are seen in banking crises."

The president of the European Commission, Jose Manuel Barroso, said this week that a banking union, along with a pan-European Union banking supervisor, could be established as early as next year without changes to EU treaties.