BRUSSELS, June 28 (Reuters) - German Chancellor Angela Merkel insisted on Friday that a single European authority to deal with failed banks would require a change in the European Union's treaty, raising an obstacle to the planned next step towards EU banking union.
European Commission President Jose Manuel Barroso said the EU executive will issue proposals for such a banking resolution mechanism in the next two weeks. EU officials dispute the need to amend the treaty, but Berlin is sensitive because of the scrutiny of its constitutional court.
"Germany has made clear that under the current treaties the Commission does not have the competence to run such a central authority or act as a resolution body. If we want new competencies then they must be linked to treaty changes," Merkel said.
She also confirmed that Germany, home of Europe's biggest automobile industry, opposed a tentative EU agreement on stricter carbon emissions curbs for cars, arguing that Europe must be careful not to harm its own industry.