"The banking proposals, and particularly the ECB oversight aspect, were expected to be the first and simplest step towards a deepening and strengthening of economic and monetary union, a process even optimists expect to take a decade or more.
Instead it is likely that every element of banking union and the fiscal, economic and political union ambitions that follow, will be fought over at length and in detail.
Tied up within banking union are some of the most contentious issues underpinning the crisis. For example, a proper deposit-guarantee scheme across euro zone banks would involve a mutualization of risk, with each euro zone country effectively acting as a deposit backstop for the others.
That is the banking equivalent of a mutualization of debt, the very thing that Germany remains adamantly opposed to, at least until the time is right.
From Berlin's point of view, pooling of risk, whether via bank deposits or joint debt issuance, is the culmination of economic integration, not something to be tackled at the start."
|source: Brussels at pains to sustain crisis-fighting momentum | Reuters|