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UPDATE 1-EU revises plan on banking safety net to win over Germany

(Adds details of plan)

BRUSSELS, Oct 11 (Reuters) - The European Commission proposed on Wednesday new measures to strengthen the EU banking sector against future crisis after two years of fruitless talks among the 28 EU states on more ambitious plans.

The softer measures are designed to win over Germany, the largest economy of the bloc and the staunchest opponent of sharing banking risks among EU states.

Germany's outgoing Finance Minister Wolfgang Schaeuble has repeatedly raised concerns that sharing risks would mean richer German banks propping up weaker rivals in other EU countries, such as Italy, Portugal or Greece.

To convince Germany, whose new finance minister may be equally resistant, the Commission has put forward a watered-down plan, which reduces the sharing of banking risks than initially envisaged two years ago.

It also proposes stricter conditions that states must meet before their banking sectors can access safety nets funded at EU level. The plan should be agreed by next year, the Commission said.

The plan, revealed by Reuters last week,, discards earlier proposals for full EU-sharing of savers' protection in cases of bank failure and leaves the financial burden largely with individual member states.

EU rules guarantee all deposits up to 100,000 euros ($118,000), a provision meant to strengthen confidence in the banking sector after a decade-long crisis that has seen the bailout of several top banks in the bloc.

But existing national schemes to insure depositors are considered insufficient in the event of a major banking crisis.

The Commission sees an EU backstop, funded by all banks in the bloc, as the best guarantee to protect savers and increase market confidence.

Under the new proposals, a European Deposit Insurance Scheme (EDIS) would intervene only after national insurance schemes have fully used their resources to rescue depositors. ($1 = 0.8449 euros) (Reporting by Francesco Guarascio zfraguarascio; editing by Philip Blenkinsop)