BLOOMBERG.COM
The euro area may be letting a good crisis go to waste again. Even after a clean-ish bill of health in stress tests for the biggest banks and a plan to recapitalize the worst performer, Banca Monte dei Paschi di Siena SpA, investors aren’t convinced the ills of the region’s lenders have been cured. What’s worse, there’s little chance of a major overhaul of the bloc’s infrastructure any time soon. As elections loom next year in France, Germany and the Netherlands, the prospects for political progress to shore up confidence in the single currency’s durability are diminishing, even with the added urgency of the U.K.’s divorce from the European Union. The 19-nation euro area still displays a fundamental split over the direction of its incomplete banking union and, beyond, how to create a common budget to complement monetary policy.
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The euro area may be letting a good crisis go to waste again. Even after a clean-ish bill of health in stress tests for the biggest banks and a plan to recapitalize the worst performer, Banca Monte dei Paschi di Siena SpA, investors aren’t convinced the ills of the region’s lenders have been cured. What’s worse, there’s little chance of a major overhaul of the bloc’s infrastructure any time soon. As elections loom next year in France, Germany and the Netherlands, the prospects for political progress to shore up confidence in the single currency’s durability are diminishing, even with the added urgency of the U.K.’s divorce from the European Union. The 19-nation euro area still displays a fundamental split over the direction of its incomplete banking union and, beyond, how to create a common budget to complement monetary policy.
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