European Union (EU) finance ministers had reached an agreement on how to build a mechanism to close failed banks, an EU commissioner said Wednesday. A single resolution mechanism (SRM), a single supervisory mechanism (SSM) and a single deposit guarantee mechanism, constitute three pillars of the eurozone's planned banking union for cutting the "vicious circle" between the sovereign debt crisis and the banking crisis, and ensure that taxpayers will not foot the bill for future bank bailouts. "As the agreement by member states for SRM has been reached, negotiations with the European Parliament can now start," said Michel Barnier, EU commissioner for internal market and services. Lithuanian Finance Minister Rimantas Sadzius hailed the agreement, saying that "it will be the fastest in EU history" if the European Parliament approved it in two months "despite many complicated issues involved." The new agreement includes a backstop to a single resolution fund. The fund, to be financed by a levy on banks, is poised to garner 55 billion euros (76 billion U.S. dollar) over 10 years. During the fund's initial build-up phase, bridge financing, a method of financing used by companies before their Initial Public Offerings (IPO), to obtain necessary cash for the maintenance of operations, would be available from national budgets or the permanent eurozone rescue fund called the European Stability Mechanism. Decisions to apply the resolution will be made by a single board consisting of an executive director, four full-time appointed members and the representatives of the national resolution authorities of the participating countries. The board would be responsible for the planning and resolution phases of cross-border banks and those directly supervised by the European Central Bank, while national resolution authorities would be responsible for all other banks. National resolution authorities would be in charge of executing bank resolution plans under the control of the board. Should a national authority not comply with its decision, the board could directly exercise power over the troubled bank.8 Barnier, however, said the SRM was far from being finalized, adding "negotiations will now start with the European Parliament in the new year. The ECON Committee (The Committee on Economic and Monetary Affairs) adopted its position... Both sides are committed to the banking union. So a compromise is possible." "But it is also true both sides are far apart on some key points. Flexibility will be needed on both sides to reach an agreement before the Easter break," he said. On European banking reform, Guntram B. Wolff, director of the Brussels-based think tank Bruegle, said there was uncertainty over the recapitalization, restructuring and resolution of the sector in 2014 and beyond. The SRM is expected to enter into force on Jan. 1, 2015. Bail-in and resolution functions will apply from Jan. 1, 2016.