Continued from page 1

Mr. de Jager said Madrid’s partners agree that “financial sector reforms in Spain must be ruthlessly implemented.” However, he said a system of EU-wide banking supervision still needed to be worked out.

But on Monday, before the eurogroup meeting began, Mario Draghi, the chief of the European Central Bank, said he was confident that a banking union in the European Union would be achieved.

“We are talking about the long-term sustainability of the European monetary union. We are going as fast as we can. It is better to do things right than in a hurried fashion,” Mr. Draghi told a committee of the European Parliament.

Mr. Rehn said the European Commission would put forward legislative proposals for the creation of a “Single Supervisory Mechanism” for banks in the euro area, involving the European Central Bank, in early September. The creation of the central bank supervision will allow the EU’s firewall fund to recapitalize banks directly rather than lending the money to a country’s government — something that increases the country’s debt load.

Irish Finance Minister Michael Noonan said it was about time.

“It was the crisis in Spain that eventually convinced the European authorities to do what Ireland has been arguing should be done for a long time — separate the sovereign debt from banking debt,” Mr. Noonan said.

Meanwhile, Greece’s new finance minister, Ioannis Stournaras, said his country would work to get its budget-balancing program back on track, but Greece, too, will need extra time to meet its targets.

“I think the size of the recession justifies, as Spain got an extension, that we should ask for an extension,” Mr. Stournaras said. He said he recognized it was still too early to expect a formal decision on the issue.

Ministers added that the final decision on Greece’s request to renegotiate the terms of the country’s bailout agreements will depend on the conclusions of the so-called “troika” of debt inspectors currently overseeing the Greek program. Mr. Rehn said a mission from the troika would go to Greece within the next two weeks to assess the country’s short-term financing needs.

“I am sure we will find a solution to this problem,” Mr. Rehn said.

Greece has had to impose harsh austerity measures, including big cuts to pensions and salaries, to secure billions of euros in rescue loans from the International Monetary Fund and other European countries that use the euro and avoid bankruptcy.

The finance ministers also re-elected Mr. Juncker to a new 2½-year term as president of the eurogroup, but Mr. Juncker said he would step down late this year or early next year.

Robert Wielaard in Brussels, Toby Sterling in Amsterdam and Daniel Woolls in Madrid contributed to this report.