The first steps to creating a banking union have been safely negotiated and a course set that should eventually safeguard the tax payers from expensive banking failures. It will also put in place the beginnings of a structure for fiscal union across the
Eurozone and this is vital if the Euro is to have any chance of surviving. Big stakes indeed but a necessary gamble by the Eurozone countries if they are to create the single European State that has been in the minds of those in Brussels.
Why a gamble? It’s a gamble because there is no certainty of success and there is a likelihood that many more changes will be introduced, moving each Eurozone Country away from its sovereignty into a single Government. There is a tendency to think that any
future government structure would be similar to the existing one in Brussels, but this could be far from the reality of what is ahead. For example why would the current heads of European States not replace the existing MEPs? Would the government have equal
representation from each European State and would there be the same democratic merry-go-round of European Presidents? We do not know what plans have been made or how they may be implemented, so it’s best to keep an open but enquiring mind.
The European Banking Union will make the ECB one of the most powerful financial institutions on Earth and we can see that the EU is following a similar structure to the USA with the ECB taking the role as that of the FED. A similar political structure could
also be adopted with a two house system. It works pretty well in the USA so why not in the EU?
All this market and political restructuring is much needed but how will this impact the markets and the consumer? It should eventually bring about political and economic stability and enable the EU to compete on the world stage on almost equal terms. In
fact it should be superior to that of China and South America in many cases. It certainly should have at least equal footing with the USA due to the diversity of its cultures and capability to innovate and negotiate equally in both eastern and western markets.
This should spill over into better economic conditions for the consumer.
It’s a potentially bright future yet it is still clouded in doubt. The UK position has exposed the view held by other EU states that there is a need to reform the existing EU arrangements and rebalance federal and domestic powers. It’s important that the
EU - including the UK - recognise the need to adapt and evolve to retain the EU structure within the far bigger opportunity that could be to the benefit of all. The Germans appear to be more aware of this than the French. It has been German financial and political
ingenuity that has kept the Euro crisis at bay and bought time for Greece and the other struggling States to come to terms with the necessary fiscal austerity resolutions. This current quiet must not herald a storm, if the EU is to not only survive but have
a chance of winning the benefits, now within its grasp.