Eurogroup Working Group's leader Thomas Wieser has revealed that the the eurozone should introduce bank bail-in rules from 2016.

According to a report in German publication Der Spiegel, Wieser called on authorities in the European Union to bring forward the 2018 deadline for the bail-in policy, in order to strengthen the continent's banking system.

The EU has been trying to work out how it can shore up Europe's fragile financial sector that has been a major casualty of the sovereign debt crisis that erupted in 2010.

A bail-in is designed to protect taxpayers from rescuing a bank in the event of financial crisis. Before bankruptcy can be declared, under current proposals, a bail-in is designed to impose losses on bondholders while leaving untouched other creditors of similar stature, such as derivatives counterparties.

Wieser called for the bail-in to be brought forward in order to allay German fears that a European wide banking union, which is required to make the monetary union work better, would be paid for by taxpayers.

North European governments, especially the Germans, have spent billions bailing out weaker eurozone countries.

It seems Germany will only move towards a banking union if a resolution is in place that ensures the German taxpayer will not foot the entire bill for bailouts in the future.

The introduction of the bank bail-in process is therefore vital to secure German support and consent for a banking union.

The urgency displayed by Wieser in his demand for bail-in laws to be implemented in 2016 to bring a banking union forward was reinforced by European Central Bank heavyweight Jörg Asmussen who called on Germany's political leaders to form a government so that they can focus on reforming the EU.

Asmussen, who is a member of the European Central Bank's executive board, said that the eurozone crisis was not over and need Germany's politicians to be decisive.

"Swift formation of a government would certainly be helpful from a European point of view as there are important decisions to be taken for Europe, for example a banking union," he said.

Much To Discuss

Different officials at key EU institutions have made various comments about the speed at which Europe should integrate and how it should deal with failing banks that pose a risk to the survival of the euro.

Just recently, finance ministers from the eurozone met in Luxembourg to tackle the issue of plugging the holes which are likely to be revealed by the European Central Bank's health checks in 2014.

The European Banking Authority revealed that the continent's banks have a €70bn ($95.7bn, £59.2bn) capital black hole in their balance sheets in September.

According to the report by the EBA, which is charged with the task of assessing European financial institution capital health, banks were not fully compliant with new capital requirement regulations coming into force in 2019.