EU leaders pledge banking reforms

The measures agreed by the EU finance ministers had been the subject of months of intense haggling.

First, finance ministers from the 27 EU countries negotiated through the night to agree to give the European Central Bank oversight of their banks. That is a key component of what many hope will eventually become a full-fledged banking union - a single rulebook for all banks and co-ordinated plans for helping lenders in trouble.

Crucially, the single supervisor paves the way for Europe’s bailout fund to give money directly to struggling banks, without dragging governments into the mess.

Dealing with the connection between banks and government debt - a toxic loop that has forced several countries to ask for bailouts after they tried to rescue their banks - also addresses a major cause of the region’s financial crisis.

Meanwhile, EU leaders today said all options were on the table to support the Syrian opposition fighting President Bashar al-Assad, raising the possibility that non-lethal military equipment or even arms could eventually be supplied.

In their strongest statement of support for the Syrian opposition since the uprising began more than 20 months ago, EU leaders instructed their foreign ministers to assess all possibilities to increase the pressure on Assad.

British prime minister David Cameron pushed for an early review of the arms embargo against Syria to potentially open the way to supply equipment to the rebels in the coming months, but Germany and others were more reluctant and blocked any quick move.

But there was widespread agreement that whatever action can be taken under current legislation should be pursued, and the arms embargo would still be reviewed at a later stage.

"I want a very clear message to go to President Assad that nothing is off the table," Mr Cameron told reporters at the end of a two-day EU summit.

"I want us to work with the opposition ... so that we can see the speediest possible transition in Syria. There is no single simple answer, but inaction and indifference are not options."

Officials said that Britain and France were keen for further discussion on lifting the arms embargo, to open the way for non-lethal assistance, at least initially.

AP and Reuters