The European Union has been in the depths of crisis for several years now, and yet it would appear as if all the actions taken to resolve it have had little effect. Politicians, bankers, and investors are locked in endless debates of who is to blame and what needs to be done to resolve the crisis. Meanwhile member counties such as Spain, Italy, and Greece continue to fall deeper into depression, and unemployment rates continue to rise to astonishing heights.
What will it take to resolve the Euro crisis? On Tuesday, July 9th the Atlantic Council and Reuters hosted a conversation with European Central Bank (ECB) Executive Board Member Jörg Asmussen on the critical role of the ECB in fostering Europe’s economic recovery, and discussed his views of the importance of the proposed banking union across the Eurozone.
“There is no doubt that the banking system in the euro area is suffering from a confidence problem,” Asmussen said. “Investors remain unsure about the health of banks’ balance sheets; about the rigor of their supervision; and about the capacity of fiscally-constrained countries to resolve banks that are no longer viable.”
Asmussen believes that the establishment of a banking union across the Eurozone to be the most important step in resolving the euro crisis. “It is essential to build trust in the banking sector; to increase transparency over asset quality; and to ensure that banks that need to be wound down, can and will be,” Asmussen explained. “From the perspective of the ECB, it is also indispensable to reintegrate financial markets and so to restore the even transmission of our monetary policy across the euro area.”
“This is why advancing with [the] Banking Union is such an urgent priority for the euro area,” Asmussen concluded. He further warned, “It is worth noting that the task we are undertaking here is comparable to the challenge of setting up the ECB and European System of Central Banks in the late 1990s.”
Asmussen believes that a banking union will be initially difficult, but overall worth it. Others , however, do not agree with him. Hugo Dixon, editor-at-large for Reuters News, believes that a centralized European Banking Union is an option too lofty to consider. In an article from July 7th he stated, “Euro enthusiasts pin their hopes on a full fiscal and political union to complement the monetary union. This is pie in the sky. Neither national politicians nor the people are willing to see much more power centralized in Brussels. There is good reason for this too: the European Union is remote and only loosely accountable.”
What is the way forward? Only time will tell. What is for certain though, is that all members of the EU need to work together to resolve this crisis if they want to remain banded together. If the current Euro crisis continues unhindered it could lead to dire effects on all of Europe, as well as the world economy.
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Finding a Future Hope for the European Union
July 16, 2013
The European Union has been in the depths of crisis for several years now, and yet it would appear as if all the actions taken to resolve it have had little effect. Politicians, bankers, and investors are locked in endless debates of who is to blame and what needs to be done to resolve the crisis. Meanwhile member counties such as Spain, Italy, and Greece continue to fall deeper into depression, and unemployment rates continue to rise to astonishing heights.
What will it take to resolve the Euro crisis? On Tuesday, July 9th the Atlantic Council and Reuters hosted a conversation with European Central Bank (ECB) Executive Board Member Jörg Asmussen on the critical role of the ECB in fostering Europe’s economic recovery, and discussed his views of the importance of the proposed banking union across the Eurozone.
“There is no doubt that the banking system in the euro area is suffering from a confidence problem,” Asmussen said. “Investors remain unsure about the health of banks’ balance sheets; about the rigor of their supervision; and about the capacity of fiscally-constrained countries to resolve banks that are no longer viable.”
Asmussen believes that the establishment of a banking union across the Eurozone to be the most important step in resolving the euro crisis. “It is essential to build trust in the banking sector; to increase transparency over asset quality; and to ensure that banks that need to be wound down, can and will be,” Asmussen explained. “From the perspective of the ECB, it is also indispensable to reintegrate financial markets and so to restore the even transmission of our monetary policy across the euro area.”
“This is why advancing with [the] Banking Union is such an urgent priority for the euro area,” Asmussen concluded. He further warned, “It is worth noting that the task we are undertaking here is comparable to the challenge of setting up the ECB and European System of Central Banks in the late 1990s.”
Asmussen believes that a banking union will be initially difficult, but overall worth it. Others , however, do not agree with him. Hugo Dixon, editor-at-large for Reuters News, believes that a centralized European Banking Union is an option too lofty to consider. In an article from July 7th he stated, “Euro enthusiasts pin their hopes on a full fiscal and political union to complement the monetary union. This is pie in the sky. Neither national politicians nor the people are willing to see much more power centralized in Brussels. There is good reason for this too: the European Union is remote and only loosely accountable.”
What is the way forward? Only time will tell. What is for certain though, is that all members of the EU need to work together to resolve this crisis if they want to remain banded together. If the current Euro crisis continues unhindered it could lead to dire effects on all of Europe, as well as the world economy.
