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The ever-elusive finalization of banking union is a serious black mark against the European Union’s ability to get meaningful business done. It is way past time to get serious about it, and the chaos coming out of Italy should reignite and give immediacy to a discussion about practical ways of getting banking union finalised.
The good news: Angela Merkel, head of the state most viscerally against sovereign risk-sharing via a European deposit insurance scheme before the European non-performing loan problem is solved, was reported to have agreed with other EU heads of state to have a proposal ready by the December summit. The bad news: Something like this is said by top European officials every year. Despite progress, there are still more than €250 billion in Italian NPLs, so any anti-risk sharing attitude will not have weakened.
It may be true, as European Commission director general Olivier Guersent said this month, that Europe will simply need another crisis before it makes completing banking union a real priority: a crisis big enough to scare officials into action but not big enough to kill the union.