Wednesday, June 27, 2012

Politics of the Eurocrisis

Not that anyone could have truly predicted where the Eurocrisis would be today - but was the idea of enhanced political consolidation really on the table?

It seemed like only a month ago everyone was saying that either the entire Euro system would unravel, or the "weakest links" would be booted out. And now, with the upcoming conference, there are plans to rework the entire system and bolster the fiscal union.

Though the plan is still being reworked, and it's unsure what consensus (if any) will come out of the conference, some of the new provisions include:

  • Giving EU institutions the ability to rewrite national budgets
  • Single European banking supervision and a common deposit insurance and resolution framework
  • More coordinated economic policy

The full document is here.

Of course, as pointed out in the FT article, this is a scaled back version of the original plan. There are no time tables or concrete provisions that explain what would happen on the bureaucratic level. We'll have to wait and see how it turns out.

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