The European Commission announced in October that it is creating a new agency tasked with helping member governments draft and manage their budgetary policies. At the same time, it asked a study group to examine the possibility of introducing a European guarantee on bank deposits in the eurozone.
<i>These two steps are correlated, and should be interpreted as part of the European Union’s broader effort to overcome an internal conflict between advocates of budgetary rigour and profligacy. The deposit guarantee may be an attempt to win back public opinion that has become estranged from European ideals, and at times openly hostile to them. What scenarios open up d...
