EU finance ministers cleared the way on Friday (25 May) for their leaders to move forwards on the deepening of the eurozone.
At a meeting in Brussels, and after late-night discussions to convince the most reluctant countries – like the Netherlands – they agreed on a package to reduce risks in the banking system.
Under the new rules, which now need to be agreed with the European Parliament, eurozone banks will apply international standards on prudential requirements and a common EU process for recovery and resolution in case of crisis.
The package of various technical measures is referred to as a risk-reduction plan – as opposed to risk-sharing, which is the part of a eurozone reform that would strengthen common instruments to help countries in case of crisis.
The need, under pressure from countries led by Germany, to first increase the eurozone’s risk-reduction capacities has been the main obstacle so far to reform plans, in particular those pushed by French president Emmanuel Macron.