Completing Economic and Monetary Union 2: Financial Union
The EU wants to strengthen "economic policy coordination, convergence and solidarity" in the eurozone. It therefore proposes the creation of four Unions: an Economic Union, a Financial Union, a Fiscal Union and a Political Union. This cepPolicyBrief deals with the Financial Union which comprises a Capital Markets Union and a Banking Union supplemented by a common deposit guarantee scheme.
In cep's view, there is no compelling case for a common deposit guarantee scheme for the eurozone. In addition, financing the bank resolution fund (SRF) by way of the ESM - as bridging finance or as a back-stop - should only take effect once there has been reasonable financial investment by the affected Member State. The creation of a Capital Markets Union may increase efficiency, strengthen competition and push up the potential for growth.