Brussels, 24 March 2023 (dpa/MIA) - Eurogroup chief Paschal Donohoe and EU leaders said at a summit in Brussels on Friday that banks in the eurozone are now better positioned after past turmoil shook the global banking sector.

"We have the reserves and the resilience to ensure the stability of our banking system at the moment," said Donohoe, currently head of the group of eurozone finance ministers.

He dismissed concerns over the implications for the eurozone of the recent state-backed takeover of troubled Swiss bank major Credit Suisse and the collapse of several smaller US banks.

Donohoe, who was arriving at the second day of a two-day meeting of EU leaders, credited a series of policy decisions taken in response to the 2008 financial crisis.

"But we can never be complacent," Donohoe added, calling for more work to be done, for example, on legislation to protect bank deposits.

Dutch Prime Minister Mark Rutte said reforms in the European banking system that imposed additional liquidity requirements were paying off despite criticism from the sector that actions were "a bit too harsh."

Deutsche Bank's difficult day in the markets did not trouble EU leaders. German Chancellor Olaf Scholz said after the meeting that the bank was very profitable.

French President Emmanuel Macron was similarly confident.

"We are not in a comparable situation. The fundamentals are sound," Macron said about Deutsche Bank in reference to Credit Suisse's crisis, which ended in a rescue merger with Swiss bank UBS, and recent financial turmoil in the American banking sector.

Macron called for a distinction to be made between short-term market speculation and the financial "fundamentals that remain sound under a solid supervision."

European Central Bank (ECB) President Christine Lagarde joined EU leaders to discuss the fiscal situation in the eurozone. The ECB has repeatedly raised interest rates in a bid to tame high inflation.

Rising living costs were also high on the agenda, as inflation, while improving, still remains at near-record highs.

Scholz said it was the EU's "common task to fight inflation" but stressed the ECB's independent role in setting interest rates.

The rapid decline of Russian gas deliveries to EU countries, widely seen as retaliation for EU sanctions on Russia imposed following Moscow's invasion of Ukraine, sent energy prices soaring and led to fears of a recession.

Donohoe said there are indications that inflation is spreading beyond the energy sector, with prices for food and services staying at high levels or increasing further.

He reiterated his call for fellow euro finance ministers to tailor public support measures in a bid to bring down prices.

The EU leaders also discussed possible reforms to the bloc's strict debt and deficit rules, which were suspended to cushion the economic fallout from the Covid-19 pandemic and the war in Ukraine.