The European Union yesterday agreed a blueprint to close failing banks but stopped short of a more ambitious plan for the euro zone to unite in tackling its troubled lenders. More than five years since the financial crisis struck, Europe is on the verge of finalising one of its most ambitious reforms since the launch of the euro - an agency and fund to shut problem banks as soon as the European Central Bank starts to police them next year. Yesterday, finance ministers from across the bloc sealed a broad agreement on this final element of a banking union. European leaders will sign off on it and the final touches will be made in negotiations with the European Parliament next year. "The final pillar for the banking union has been achieved," Germany's Finance Minister Wolfgang Schaeuble said. The project's aim is to prevent a repeat of the turmoil when failing banks in countries from Ireland to Cyprus brought their states to the brink of bankruptcy. By setting up a system to shutter troubled lenders, Europe would equip the ECB with the means of dealing with teetering banks. However, the scheme that has emerged, because of efforts to accommodate sceptical countries, is unwieldy. It requires the ECB to fire the starting shot by declaring a bank as too weak to survive. What follows, however, involves input from a new agency empowered to shut banks, the European Commission and up to 18 different euro-zone countries. Schaeuble played down concerns that this could prove cumbersome. "It has to go quickly in an emergency, over a weekend," he said, adding that the new structure would be nimble enough to do so. Michel Barnier, the European commissioner in charge of financial regulation, expressed frustration with the watered-down deal. "When I compare it with my original proposal, I have regrets," he said. "I would like to have seen things done otherwise." The ECB, which also lobbied for a simpler system, achieved limited success in its suggestion for a fast-track procedure in an emergency to decide the fate of a sick bank. It now remains to be seen if the European Parliament, which also has a say in the law, will approve the scheme. Despite yesterday's progress, central elements of the banking union are still missing. For one, Germany continues to stand firm against the use of euro-zone money to back a scheme for tackling troubled banks. Schaeuble made clear that no money from the euro zone's rescue fund would be available directly for bank clean-ups. Instead, a government struggling to pay for a failing bank will have to ask for a bailout.