Europe's leaders need to act decisively on banking union in order to spur the region's economic recovery, Richard Hoey, chief economist at BNY Mellon told CNBC on Tuesday.
"One of the reasons Europe is weak is it has been slow to address the problem of banks that need recapitalization," he said.
His comments come as European Union (EU) finance ministers are meeting in Brussels with the contentious issue of a region-wide banking union high on the agenda.
A number of EU member states disagree over the proposed system, with the finance ministers of Spain, Portugal and France pushing for a banking union, in the face of staunch opposition from Germany.
"In Europe they debate banking union… it's time to end the debate and make some decisions and move forward," Hoey said.
"What Europe needs is its Ronald Regan, its Maggie Thatcher… it needs its Rambo to make decisions as opposed to 27 different countries debating: 'what do we do?'"
Europe's economies have been battling with falling demand as a result of austerity measures and a credit crunch in the wake of the 2008 financial crisis. The European Commission forecast earlier this month that annual gross domestic product (GDP) would contract by 0.1 percent in the European Union (EU) and 0.4 percent in the euro zone this year.
According to Hoey, Europe's economy would start to pick up at the end of 2013, but its revival would be a slow one.
(Read More: Confusion Reigns: Europe Bickers Over Banking Union)
"The European economy is about to hit the bottom of the saucer, which is to say that we'll be recovering in the European economy at the very end of 2013 and in 2014. But the pace of recovery… it's a pretty flat pattern," he said.
Hoey stressed the global economy was recovering well, but that Europe and the region's peripheral countries were of particular concern.
"If you only look at peripheral Europe you say: 'oh, what troubles we have'. But look at the broad global economy, with tremendously stimulative monetary policy, and the U.S. economy is accelerating," he said.
"If the rest of the world were as weak as Europe, the global economy would be in trouble. But that's not true – the rest of the world is in pretty good shape."
Hoey said the U.S. recession had ended earlier than elsewhere because it had acted quickly to strengthen its banks' balance sheets, something that was lacking in Europe.
- By CNBC's Katrina Bishop, follow her on Twitter @KatrinaBishop