Many are upset when British politicians in turn call on Merkel to ride roughshod over German public opinion and parliamentary majorities and move straight to eurobonds and Europe-wide guarantees for banks.
Cooper also highlighted Europe-wide guarantees on maternity leave and protections against discrimination at work, saying they are "good for British women and for British businesses who want to do the right thing but don't want to be undercut when operating in Europe".
She said the German government should put its energies instead into ensuring an EU-wide guaranteed minimum income.
Laiki operates as a "branch" in the UK, so its depositors were covered by the Cyprus government for the €100,000 (£85,000) European-wide guarantee in savings.
The third leg is a credible euro-wide guarantee on deposits to reassure savers that a euro in an Italian or Spanish bank is just as safe as one in a German or Dutch bank.
The idea of a banking union to coordinate the oversight of European banks, and possibly create a euro zone-wide guarantee fund to insure deposits, is quickly gaining traction.
The scale of withdrawals from Greek banks – almost 25% of deposits have been taken out in the past two years – and fears that other countries may suffer mass withdrawals has led to speculation that a eurozone-wide guarantee is needed to maintain confidence in the banking system.
Financial advisers and private bankers whose clients have accounts too large to be covered by a Europe-wide guarantee on deposits up to 100,000 euros, are reporting a "bank run by wire transfer" that has picked up during May.
"There must be a District-wide guaranteed baseline of services, like Arts instruction, libraries and nursing, that every student, at every school, has access to, regardless of local budgetary decisions," he explained.
Despite the looming threat of default and a banking collapse, Cypriots on Tuesday balked at EU demands for a levy on bank deposits to raise 5.8 billion euros, an unprecedented measure that opponents said would have violated the principle behind an EU-wide guarantee on deposits of up to 100,000 euros.
Mr. Rehn spoke after the commission released recommendations calling on Europe to take more steps "towards full economic and monetary union, including a banking union; euro area financial supervision and euro-area wide deposit guarantees".
