The European Commission wants to plough ahead with the creation of a bloc-wide banking union, which was first proposed in 2012 by the end of 2018, in a bid to prevent a repeat of the 2008/09 financial crisis.
But the plans have repeatedly stalled as neither the EU Council, member states nor the European Parliament have managed to reach an agreement despite two years of talks.
Germany and Denmark are thought to be tough critics of the controverisal plans to reform the eurozone.
EU commission vice-president Valdis Dombrovski is keen to push the debate in a bid to build momentum for reforms to the currency bloc in the next coming months.
However he is set to face strong resistance from Germany, whose banking lobby are opposed to taking on responsibility for non-performing loans held by financial institutions in other countries.
The bloc’s largest economy is demanding clarity on risk sharing and risk reduction.
Angela Merkel’s Germany warns that sharing risk means German banks will inevitably end up supporting weaker banks elsewhere in the bloc.
The European Commission late last year offered a watered-down plan to decrease risks in the banking sector, in a bid to break years of stalemate over the plan that was fiercely opposed by Germany’s former finance minister, Wolfgang Schaeuble.
But with Mr Schaeuble gone after an election in September that weakened Mrs Merkel’s conservatives, new momentum for eurozone reforms is building, especially as the German chancellor ploughs ahead with her coalition with the anti-austerity Social Democrats (SPD).
The Commission’s so-called European deposit insurance scheme (EDIS) is meant to cover insured savers – up to €100,000 – in case of a bank failure.
EU bosses said the scheme should be introduced more gradually than initially planned and discarded initial plans for a full sharing of depositor protection.
Mr Dombrovksis said: “We’re working at getting as far as possible with EDIS, starting with phase one.”
“We see scope for this. If you look at the roadmap, at what has been delivered on the risk reduction side, I think it’s time to move also on the risk-sharing side,” according to politics news site, Politco.co.uk.
However Germany is concerned that with high ratios of bad loans in banking sectors across Europe, German savers may be first to be asked to help pay depositors elsewhere.
Denmark has also approached plans for a banking union with caution as it had often taken a strong line in the past over bank bailouts
Participation in the banking union would mean closer integration for a country that has been an EU member since 1973 but holds opt-outs from EU policies on security, police and the euro.
The banking union project suffered a setback last year when Rome closed down two Veneto banks by means of a deal that could cost the Italian state up to €17 billion – breaking a principle agreed by European leaders that investors should shoulder the cost of bank failures.
The banking union covers all countries in the euro zone, but European Union countries outside the currency area such as Denmark can also join.