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Brussels - The International Monetary Fund is urging the 18-nation Eurozone to press ahead with its planned banking union reforms to lay the foundation for fresh growth and job creation.

IMF chief Christine Lagarde said Tuesday that the bloc must reinforce its institutions to stabilise its financial market and reduce “the very damaging link” of failing banks dragging down weaker governments' finances.

Lagarde insisted the bloc should therefore pursue its plan to create a pan-European authority to shut down or restructure failing banks, complete with its own financial backstop.

Plans to set up the so-called resolution authority are currently being discussed between the EU governments and the European Parliament in the hope of approving the legislation by mid-April. - Sapa-AP