It is also necessary for the euro area to move towards completing banking union in order to create a truly single banking system and achieve its objectives of breaking the banksovereign nexus, making the financial system more resilient, and protecting the interests of taxpayers.
In parallel, the authorities will need to decisively deal with remaining crisis legacies to create a better foundation for bank lending to the real economy. To further widen the scope for cross-border private risk-sharing in Europe, the EU will have to make progress in developing a capital markets union (CMU).