However, smaller steps can be taken to improve the functioning of the banking union – such as the removal of national options in regulation and supervision, as asked by ECB Banking Supervision. A philosophical discussion is not needed for all of this. 2017 will present an opportunity to make tangible progress on these issues, while the debate continues on the bigger ones.
Without fiscal capacity, will the euro area just keep falling into one crisis after another? I personally think that the euro area will not be out of the woods until Member States create some form of a common fiscal capacity to help cope with large economic shocks.