German finance minister Wolfgang Schäuble said today there was going to be "a real tug-of-war" over how much European Union member states had to contribute to the European Union's bank resolution fund, but German banks were going to be hit hard.

"It is still unclear how exactly the levy will be organised," the minister said after a news conference in Berlin, adding that the European Commission had yet to make a proposal.

EU leaders took the final step to complete a banking union yesterday with an agency to shut failing euro zone banks. It will set up a a common €55 billion back-up fund over eight years. Germany insisted that the 18 euro zone countries should not jointly shoulder the cost of dealing with individual bank failures.

But Mr Schäuble said the contribution of German banks “will be high. I have always said so”. (Reuters)