Cyprus overshadows banking union as ECB prepares for watchdog role

BRUSSELS: EU lawmakers are set to empower the ECB this week to supervise banks from mid-2014, but they will struggle to reinstate a vision of wider banking union, shaken by a levy imposed on Cypriot savers.

Last year's agreement among countries to give the European Central Bank new powers to supervise euro zone banks from 2014 was initially applauded as a first step towards closer integration to help underpin the euro.