Ashton Whiteley: EU Leaders Prioritize Banking Union

Leaders of the EU's 27 member countries will meet this week to discuss broader integration of the eurozone.

Shanghai, China-based Ashton Whiteley economists say European Union leaders will probably reach a decision this week about giving priority to eurozone integration and completion of its banking union. In addition, they will likely extend the duties of the eurozone bailout fund and tend to more politically difficult problems at a later stage.

This week, leaders of the European Union’s 27 member countries that will stay in the bloc after the UK leaves in March of 2019 will meet to talk about ways to strengthen and develop eurozone integration. This meeting will mark the beginning of six months of detailed discussions between finance ministers.

Eurozone leaders are, for the most part, in agreement that a single goal of deeper eurozone integration is necessary to better safeguard the 19 countries using the euro as their currency from financial crises. Ashton Whiteley economists believe that this will also help the European Union to rally around the single currency.

However, French President Emmanuel Macron, German Chancellor Angela Merkel and European Commission President Jean-Claude Juncker have significantly different views on how to define and achieve deeper eurozone integration.

Summit Chairman Donald Tusk has suggested in a letter to the EU leaders that they focus on key points of broad integration.

The first two focus areas are the development of the eurozone bailout fund, and turning it into a European Monetary Fund. The new fund would deal with future bailouts and would eliminate the need for the ECB and International Monetary Fund.

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Source: Ashton Whiteley