The Financial Times applauds Europe’s move to a banking union, with the entire eurozone – instead of individual countries – assuming responsibility for supervision and rescue of banks that operate within the currency union.
This was what Madrid needed: the “rescue” of its banks earlier in the month was a millstone around its sovereign neck. There is now a chance that a European problem – caused by reckless private lending from surplus countries to reckless private borrowers in the periphery – will get a European solution.
Amid broad market euphoria, the most dramatic response was the plummeting yield on Irish sovereign debt. A statement that “similar cases will be treated equally” gives hope that the cost of bailing out Ireland’s banks may also be shifted to the eurozone level. That would repair Europe’s extortion of Irish taxpayers for the benefit of creditors in the eurozone core.
“One small step for European mankind“, editorial, Financial Times, 30 June 2012.