The latest Grayling BigPictureBrussels explains that:

  • Two mainstream parties in Greece managed to achieve a majority in the weekend’s elections and are likely to form a government of national unity to press ahead with the terms of the country’s bailout. A Greek default has however not been ruled out.
  • Earlier this month, the European Commission adopted its package on bank recovery and resolution with the aim of putting banks on a stronger footing to face down future crises.
  • German Chancellor Angela Merkel has made it abundantly clear that a banking union is impossible without first establishing a fiscal union – an idea resisted by France and Italy, not to mention the UK.
  • The Spanish bailout and the uncertainty in Greece have pulled the Eurozone closer to a banking union, and it remains to be seen whether it can be designed in a way that suits both the weaker and stronger economies and does not undermine the EU’s single market in financial services.