The decision by ministers of the 17 EU nations that use the euro currency is expected to be backed by the ministers of all 27 EU members when they meet later Friday at in Dublin Castle.
The move is intended to help the countries to resume long-term bond sales when their bailout loans run dry. Ireland's run out later this year, Portugal's in 2014.
The ministers reiterated Friday that up to 10 billion euros ($13 billion) in loans will be provided to Cyprus, rejecting reports Cyprus might be granted more financial assistance.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
European finance ministers are looking to make progress on the creation of a single supervisor to watch over banks — a task officials say has assumed even greater urgency since a banking crisis in Cyprus stoked renewed fears over the region's debt crisis.
The meeting of the 27 finance ministers of the European Union countries in the Irish capital is the first since the chaos of the Cyprus bailout, which resulted in big bank depositors suffering big losses and the imposition of capital controls for the first time since the euro was established in 1999. The meeting also takes place amid renewed market worries over Europe's debt problems, and particularly the size of other banking sectors, notably that of Slovenia's.
Irish Finance Minister Michael Noonan said he expected the finance ministers to endorse a plan for a central authority for Europe's banks that has been developed in Brussels by national representatives to the EU.
"I think the big breakthrough today will be that we have now got a political agreement on the single supervisory mechanism," Noonan said on his way into the meetings Friday. After that, he said, Ireland, which currently holds the six-month rotating presidency of the EU, will begin working to develop a policy on bank resolution.
The plan is to give the European Central Bank central oversight of all European banks, accompanied by a common bank resolution mechanism and a joint bailout fund. But the plan won't take effect before next year, as Noonan acknowledged Friday.
The finance ministers, meeting in Dublin, will also consider extending the repayment schedules on bailout loans previously given to Ireland and Portugal. That would ease the burden of repayment, reduce the squeeze on government spending and potentially boost growth in both countries.
Jeroen Dijsselbloem, president of the Eurogroup of finance ministers from the 17 EU countries that use the euro, said extending the payment schedules was very important for those countries because it would help them get out of the constraints demanded by their respective bailout programs — in return for their bailout cash, both countries have had to enact tough austerity measures, such as cutting spending and raising taxes.
The situation in Portugal was complicated this month, however, when the country's constitutional court struck down parts of the government's austerity program, making it necessary for the government to look for other ways to meet its deficit reduction targets. Those measures will then have to be evaluated by the country's international creditors to see whether they fully make up for the programs the court struck down.
In addition, Noonan said that extending the repayment schedules might require the approval of parliaments in some EU countries.
The meetings will continue on Saturday.
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