World financial leaders urged the European Union to complete its banking union quickly to help growth, but Germany stood firm that the next step towards such a union should be through a lengthy and risky process - a change of EU law.
"In the euro area the foundations of economic and monetary union should be enhanced, including through an urgent movement towards banking union", finance ministers and central bankers from the G20 leading economies said in a statement.
The next step is to agree how the eurozone will deal with closing down failed banks and how it will pay for that in the interim period before enough fees from the financial industry accrue to cover the potential expense. The idea is to use the eurozone bailout fund, the European Stability Mechanism, to provide the necessary money for resolving failed banks in that period, but that means the use of eurozone taxpayers' money.
The German government, which faces elections in September, believes that without a treaty change the potential use of German taxpayer money for winding down a bank in another eurozone state could give grounds to question it in the German constitutional court.
EU officials are also concerned that if the EU opens the possibility of treaty change, eurosceptic Britain would use the opportunity to demand to get back some of the powers already ceded to the union in exchange for its support.
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