(Bloomberg) -- Lawmakers on a key European Parliament body approved Thursday the first step of a controversial plan to pool insurance for bank depositors.

The committee on economic and monetary affairs voted in favor of creating a deposit insurance fund as it seeks to build momentum for a broader European Deposit Insurance Scheme aimed at implementing joint deposit protection. This would help shield deposit guarantee schemes against local shocks with the overall plan remaining for a later stage.

The committee, however, decided not to vote on a mandate to enter into negotiations with other European Union decision-making bodies, which means that the debate will extend well into the fall. Two German bank lobby groups in a joint statement welcomed the decision not to give a mandate as “appropriate.”

The proposal, which was largely dormant since it was introduced by the European Commission in 2015, got a sudden boost with the appointment in February of a new lawmaker to shepherd it — Othmar Karas, an Austrian politician in the parliament’s biggest political party, the European People’s Party.

Key to the proposal, a deposit insurance fund would provide liquidity support where the available financial means of a deposit guarantee scheme are used for payout in the event of a bank’s resolution. The text also establishes the powers of the single resolution board to use and manage the fund, with its target level reaching 50% of the national deposit schemes after three years. Contributions from participating banks will be calculated on the basis of covered deposits and a risk-adjustment factor per bank.

If the deposit insurance funds fail to provide enough liquidity support to a scheme participant, all other contributors will be obliged to lend to the fund if requested by the board, capped at 30% after the three-year build-up period of the fund.

Even after the panel approved the measure, it won’t advance in the current session of parliament, which holds its last plenary meeting at the end of the month ahead of European elections in June. After that, it will take some time for the new parliament to get up and running.

The scheduled vote drew criticism from bank lobbyists in Germany, France and Austria, who said it would weaken financial stability in Europe. They urged lawmakers in a letter Tuesday to first conclude a related package of measures that some view as necessary to pave the way for joint deposit insurance.

Europe’s project for a banking union has long stalled because of concerns from some states about sharing risk. While the European Central Bank was established as a single banking supervisor after the financial crisis, member states haven’t been able to agree on a common fund to protect depositors, with richer nations such as Germany demanding poorer countries do more to reduce risks before they accept pooled liabilities.

Thursday’s vote could help keep the proposal for joint deposit protection alive, but it may struggle to gain traction given continued opposition by several EU governments. 

“In view of multiple global risks, this issue needs to be dealt with deliberately rather than rashly,” German lobby group BVR said in a post on LinkedIn on Wednesday.

--With assistance from Stephan Kahl.

(Updates with vote results, comments throughout.)

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