Recent evolutions in the Economic and Monetary Union and the European Banking Union : a reflection

Abstract

As is well known, the European Union (EU)’s Economic and Monetary Union (EMU) relies on an asymmetric structure introduced in the Maastricht Treaty (1992). The fully integrated Monetary Union in whose framework euro area Member States have attributed exclusive competence to the EU exists next to an Economic Union in which Member States’ economic policies are merely coordinated. This imbalance became particularly visible and problematic when the 2007 economic and financial crisis broke out. The need to strengthen the coordination among Member States’ economic and fiscal policies, as well as the need to introduce harmonised banking prudential rules and a European Banking Union became particularly acute at that point. The crisis required the adoption of several reforms and the creation of new instruments to save the economy of Member States in difficulty, and beyond this, to ensure the survival of the euro.