Financial fragmentation has the opposite effect: in the past, it weakened political unity and reduced the impact of the EU’s actions. This provides a powerful incentive to further advance EU financial integration and deepen the Economic and Monetary Union.3 Two areas are crucial in this respect: completing banking union and deepening capital markets union.
Both are necessary to finance the digital transformation and the green transition – the two major challenges that lie ahead. The Russian invasion has demonstrated how vulnerable Europe is due to its high dependency on fossil fuel imports from Russia.