The challenges of Europe's fourfold union
Five years after the first tremors in Europeâ??s banking system, what makes the crisis unique is the absence of a democratically accountable decision-making framework; there is an 'executive deficit' that compounds Europeâ??s democratic deficit. The author argues that the only way to resolve the crisis successfully is a sustained effort to achieve a 'fourfold union' agenda: banking union, fiscal union, competitiveness union and political union. Progress must be made in parallel on each of the four components. In particular, successful progress towards banking union requires a combination of short term action, including the establishment of a temporary resolution authority to identify undercapitalised banks and to restructure them, and longer-term measures, including the creation of permanent authorities for supervision, resolution and deposit insurance. This Policy Contribution reproduces Nicolas VÃ©ronâ??s statement delivered at the hearing on 'The Future of the Eurozone: Outlook and Lessons' at the Subcommittee on European Affairs of the US Senate Committee on Foreign Relations, in Washington DC on 1 August 2012.
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