At their sixth and final gathering of 2012, they will discuss closer fiscal ties for their troubled currency union, a drive that some officials worry has lost momentum since ECB President Mario Draghi calmed markets this summer by pledging to do "whatever it takes" to save the euro. "We need to keep the momentum, keep the determination, keep the focus, and that is going to be my message to leaders this evening," said European Commission President Jose Manuel Barroso.
After a hectic year of crisis management, during which Greece had a close brush with the euro zone exit, the bloc appears to be heading into 2013 on a positive note. In addition to getting agreement on the first stage of a "banking union", a bold step towards pooling sovereignty, finance ministers also approved the release of nearly 50 billion euros in fresh aid for Greece, averting a catastrophic default and the risk of a so-called "Grexit".
ECB President Mario Draghi hailed the deal on banking supervision as an "important step" towards a stable economic and monetary union. Chancellor Angela Merkel, speaking on her way into the summit in Brussels, also praised the agreement, saying it would boost trust and confidence in the euro zone. Olli Rehn, the EU commissioner for economic and monetary affairs, said "Cassandras" who had predicted disaster for the euro had been proven wrong.
But there is no time to relax. The next stages of banking union - creating a resolution fund for winding up troubled banks and co-ordinating deposit guarantees to protect savers - will be fought over even harder. And then there will be political and financial hurdles to negotiate through the year.
With Silvio Berlusconi vowing to contest an Italian election early next year, a full bailout of Spain still on the cards and a German general election in September casting a long shadow, 2013 promises to be the EU''''s fourth turbulent year in a row, and that''''s without even considering risks from bailout victims Greece, Ireland or Portugal.
The immediate priority is to finalise the legal framework for banking union and get the backing of the European Parliament. Then the ECB must hire staff and decide how to carry out its mandate. It is not expected to be fully operational before March 2014.
Under the deal sealed on Thursday, officials said the ECB would regulate some 150 to 200 banks directly, mostly major cross-border lenders and state aided institutions, with the power to delve into all 6,000 banks in case of problems. "It''''s very good news that shows that step-by-step the euro zone and the European Union are coming out of the crisis," French Finance Minister Pierre Moscovici told reporters. Completing such a complex process would be one of the EU''''s biggest achievements since the region''''s debt crisis first erupted three years ago.