The Eurozone debt crisis and the European banking union: “Hard choices”, “intolerable dilemmas” and the question of sovereignty

Aimilios Avgouleas, Douglas Arner

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The 2008 global financial crisis spread to most of the developed economies, including those of the European Union. Unfortunately, despite decades of effort to build a Single Financial Market, almost all EU jurisdictions lacked proper crisis resolution mechanisms, especially with respect to the cross-border dimensions of a global crisis. This led to a threat of widespread bank failures in EU countries and near collapse of their financial systems. Today, in the aftermath of the Eurozone financial crisis and the recent Brexit vote, the EU is at a critical crossroads. It has to decide whether the road to recovery runs through closer integration of financial policies to follow recent centralization of bank supervision and resolution in the European Banking Union (EBU) or whether to take the path of fragmentation with a gradual return to controlled forms of protectionism in the pursuit of narrow national interest, although the latter is bound to endanger the single market. In many ways the outcome of the British referendum points to that direction. Therefore, the policy dilemmas facing the EU and contemporary institution building within the Eurozone provide a key window into the future of both global and regional financial integration. This article offers a critical evaluation of these dilemmas and explains the wide ranging significance of post-Brexit policy choices in the EU.
Original languageEnglish
JournalInternational Lawyer
Volume50.1 (50th Anniversary Edition)
Publication statusPublished - 25 Jan 2017


  • European Banking Union
  • NPLs, SSM, ESM
  • Eurozone debt crisis
  • Eu financial integration


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