* Europe's leaders hold sixth summit of 2012
* Ministers clinch deal on banking supervision, Greek aid
* Recession, Spain bailout, elections loom next year
BRUSSELS, Dec 13 (Reuters) - European leaders agreed to
press on with further steps to shore up their finances and
sustain momentum in tackling the debt crisis on Friday, a day
af ter clinching a deal on banking su pervision and approving
lon g-delayed aid to Greece.
After more than eight hours of late-night talks at a summit
in Brussels, leaders promised to push ahead with setting up a
mechanism to wind d own p roblem banks, although it was unclear
when the facility would be completed.
They also launched tentative discussions on how to make
countries stick to economic targets and on creating a
"solidarity fund" to help member states suffering one-off
economic shocks, but did not delve deeply into either issue,
pu shing the debate out to the middle of next year.
With officials concerned about complacency creeping into
decision-making now that financial markets have calmed and the
crisis seems less acute, leaders appeared intent on showing that
they are not relaxing.
That said, no concrete decisions were taken at the summit .
I nstead, i t was more about v erbal commitments to push ahead.
" This evening we decided to put in place a single resolution
mechanism, " Herman Van Rompuy, the president of the European
Council and chairman of the summit, told a news conference.
The European Commission will present a proposal on the
mechanism, which would wind-up troubled banks by keeping the
good parts alive while the unhealthy operations are shut down,
during 2013, Commission President Jose Manuel Barroso said.
French President Francois Hollande told reporters the
mechanism would "see the light of day" during the year, but it
was not clear whether he expected it to be functioning by then
or merely be in the early stages of construction.
"We agreed a roadmap for the future development of the
currency union," said German Chancellor Angela Merkel, without
going into detail about the discussions.
The two-day summit, the sixth and last of 2012, had only
ever been intended to be a detailed discussion on how best to
overhaul economic and monetary union and correct the problems
that have fuelled three years of debt crisis.
The meeting was held just hours after EU finance ministers
achieved a significant breakthrough in negotiations over a
'banking union' by agreeing that the European Central Bank would
be made the chief supervisor of euro zone banks.
That decision, and another by euro zone ministers to release
up to 50 billion euros in new aid to Greece, marked two positive
developments after a long year of crisis-management and took
some of the pressure off leaders to make major strides.
"CASSANDRAS"
ECB President Mario Draghi hailed the deal on banking
supervision, the first stage towards a banking union with more
pooled sovereignty, as an important step towards a stable
economic and monetary union.
Under the deal, officials said the ECB would regulate some
150 to 200 banks directly - all major cross-border lenders and
state aided institutions - with the power to delve into all
6,000 banks in case of problems.
Olli Rehn, the EU commissioner for economic and monetary
affairs, said "Cassandras" who had predicted disaster for the
euro and a Greek exit had been proven wrong.
But there is little time to relax. The next stages of
banking union - creating a resolution fund for winding up
troubled banks and coordinating deposit guarantees to protect
savers - may be fought over even harder. And then there will be
political and financial hurdles to negotiate through the year.
"The fact that the situation in the financial markets is now
better than before should not be seen by the governments as a
way to procrastinate," European Commission President Jose Manuel
Barroso told reporters.
Much of southern Europe faces another year of grinding
recession with record unemployment and deepening poverty that
will tear at the fabric of wounded societies and may push
governments' efforts to reduce deficits further off course.
With Silvio Berlusconi vowing to contest an Italian election
early next year, a full bailout of Spain still on the cards and
a German election in September casting a long shadow, 2013
promises to be the EU's fourth turbulent year in a row, even
without risks from bailout victims Greece, Ireland and Portugal.
Italy is a particular concern if the next government rows
back on any of the economic reforms put in place by technocrat
Prime Minister Mario Monti, whose time in office has helped
stabilise financial markets and stave off the crisis.
Several participants at a pre-summit meeting of centre-right
leaders in Brussels urged Monti to stand as a candidate in an
election expected in February, but he gave no indication of his
intentions, a person at the meeting said.
Many European leaders fear a return of the erratic
billionaire Berlusconi, who abruptly changed course on
Wednesday, saying he would step aside if Monti agreed to lead
the centre-right into the election.