July 2013 marks one year since European governments committed to the creation of a ‘banking union’ in the EU. In their own way each of the three steps taken by European leaders since June 2012 has suggested that there is little real distinction between banking union and political union in Europe. Confronted with the political reality of pooling exposure to each other’s banks, and the concomitant pooling of the power to govern banks in the collective rather than the ‘national’ interest, Berlin in particular has pulled back from full ‘Europeanisation’ at each stage. In this respect, Europe’s idea of progress on banking union over the last year tells us a lot about the current limits of a unified political economy in Europe.
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