Eurozone Finance Ministers Meet Ahead Of Summit

European Commission President Jose Manuel Barroso said what's needed are "a banking union, a fiscal union, and further steps towards a political union."

The finance ministers of the eurozone's four biggest economies were set for talks in Paris late on June 26, ahead of this week's European Union summit.

Leaders at that broader June 28-29 summit are expected to discuss measures to resolve the worsening eurozone debt crisis.

Reports say it will be the 20th time EU leaders have met to try to resolve the crisis that has spread across Europe since it began in Greece in early 2010.

Meanwhile, a report drawn up by EU President Herman van Rompuy, European Commission President Jose Manuel Barroso, Eurogroup leader Jean-Claude Juncker, and European Central Bank chief Mario Draghi proposes to move "over the next decade" toward greater centralized power for the "financial sector, for budgetary matters and for economic policy."

Barroso said in Brussels the dramatic shift being considered in the report "should start with steps that can be taken immediately without a treaty change" such as banking union.

"For a genuine Economic and Monetary Union to be established, I think that we need a banking union, a fiscal union, and further steps towards a political union," Barroso said.

Barroso, speaking at the European Policy Center in Brussels, said the eurozone crisis is the the biggest danger to post-war European integration.

"This crisis is the biggest threat to all that we have achieved through European construction over the last 60 years," Barroso said. "Faced with this stark reality, standing still is not an option. A big leap forward is now needed. It may not be simple. It will require ambition, vision, and determination to enact far-reaching reforms."

The euro meanwhile lost value against the dollar on financial markets on June 26, amid investor doubts that any substantial decisions will be made at the summit.

An international ratings agency has downgraded the credit ratings of 28 Spanish banks after Spain formally requested a bailout for its banks on June 25.

The same day, Cyprus announced it was seeking financial assistance for its banks, which are heavily exposed to the debt-burdened Greek economy.

Cyprus would be the fifth eurozone country -- after Greece, Ireland, Portugal, and Spain -- to ask for emergency funding from its eurozone partners.

The island's government did not specify a figure for its request. Cypriot media reports, however, said Cyprus may need a bailout of up to 10 billion euros -- or over half the size of its economy.

The bailout request comes as Cyprus prepares to assume the rotating EU Presidency on July 1.

The eurozone has already pledged up to 100 billion euros in financial assistance to Spain's banks, which have been hit hard by a crash in the country's real estate sector.

Based on reporting by Reuters and AFP