EU Commission proposes new centralized plan to close failing banks

The European Union has outlined another key part of its plan to deal with the economic and financial crisis by proposing a blueprint for a centralized system to deal with failing banks.

Jose Manuel Barroso, the president of the EU's executive arm, the Commission, said Wednesday that with the new proposal "it should be banks themselves, and not European taxpayers, who should shoulder the burden of losses in the future."

The common rules for a centralized approach would replace the current national strategies, where local banking regulators have often proved not to be forceful enough in dealing with their home banks.

Yet some see it as another proposal from Brussels to erode countries' national sovereignty.