After the European summit of 18-19 October a two-folded conclusion can be drawn: the European banking union has been put forward and nations’ interests still diverge. After a night of discussion, as usual at these summit, European leaders agreed to establish a banking supervisor for the eurozone, the first pillar of a concrete banking union (the others are a centralized management for crisis and a banks recapitalisation system), at the latest by the end of 2013. “Member States would aim to agree on a legal framework by 1 January 2013”, this is the wording of the official final agreement.
The EU’s view is that a sound banking union is fundamental to achieving the economic and monetary union that can remedy the current crisis. According to the European Commission’s original proposal, the banking supervisor would watch over all 6,000 banks in Europe by the end of 2013 allowing the European Central Bank (ECB), which has supervisory powers, to intervene in the event of crisis or potential default. Thanks to the European supervisor, the ECB would not only be allowed to shut down a hazardous bank but to grant funds via the new established European Stability Mechanism (ESM).
At their traditional post-summit press conference, European Commission president José Manuel Barroso and European Council president Herman Van Rompuy stressed that “the urgent element now is setting up a single supervisory mechanism to prevent