BRUSSELS -- European Union leaders gave an enthusiastic thumbs-up Thursday to a new mechanism to handle ailing banks, but analysts likened it to a Band-Aid that falls short of what's needed.
French President François Hollande said the new centralized institution for saving or shutting down troubled banks across the 17-nation eurozone will help prevent new financial crises and spare governments from having to save failing banks.
"Now the European taxpayer . . . won't have to pay anything if there were another financial crisis," Hollande said at a summit of the European Union's 28 leaders in Brussels.
But analysts were much less impressed, pointing to the new institution's cumbersome decision-making structure and lack of readily available joint funds.
"This compromise . . . is an inelegant step in the right direction," said Daniel Gros of the Centre for European Policy Studies. "It leaves as many problems unresolved as it addresses."
Following months of haggling, the EU's finance ministers late Wednesday reached a deal on the technical details for the agency dealing with failing banks, establishing a final element of the eurozone's planned financial market overhaul.
One of the reasons Europe got into such financial trouble was that countries such as Ireland or Spain had to step in to save their banks when the financial crises hit, eventually forcing the governments into seeking a bailout themselves.
But until a joint fund of 55 billion euros (about $75 billion) is available, help for ailing banks will come from a complex combination of funds from national bank rescue authorities and the European rescue mechanism.
"If you arrive as a patient in a hospital's emergency room and at first a meeting of the clinic's supervisory board is called instead of the physician, then I don't think it will be good for your health," European Parliament President Martin Schulz said.