Recent economic history has shown how dangerous it is to lose your nerves in times of crisis and panic as it is to leave things halfway and let go with complacency. The European economy and its institutions have responded to the pandemic and the war in Ukraine in a completely different way than what was seen in 2008, with initiative, forcefulness and speed, with "resilience and robustness". The worst was feared and never happened, but now the shocks have reached the financial sector and crucial issues such as the completion of the Banking Union, the creation of a European Deposit Insurance Fund, adding more entities to the Community supervisory and resolution umbrella and the ratification of the ESM, the mechanism that was created for the rescue of countries, They are still up in the air. And just as disturbing are the market movements of these weeks as the apparent lack of blood among continental leaders.

This Friday, Brussels has experienced a Eurosummit. The Treaty on Stability, Coordination and Governance of Economic and Monetary Union says that twice a year Heads of State and Government must hold a Euro summit. For a long time they have not paid the slightest attention to the issue, which is solved at a time without great discussion and is settled with irrelevant conclusions. Today, once again, that has been the case. The leaders have ended the week with a general discussion and a document of brief conclusions, of only three points, and that does not even face the elephants in the room.

In the room were the 27, but also the president of the ECB, Christine Lagarde, and the president of the Eurogroup, Paschal Donohoe. According to Frankfurt sources, Lagarde told those present that the euro zone banking sector is resilient because it has strong capital and liquidity positions and internationally agreed regulatory reforms have been implemented, but that "recent developments remind us how important it has been to continuously improve these standards" and that "we need to make progress in completing the Banking Union. ". Lagarde insists that there is no trade-off between price stability and financial stability," as the "toolbox allows us to address risks for both" and "to provide liquidity to the euro area financial system, if necessary."

Nothing new, but also nothing enough by itself. The ECB has been complaining for 10 years that governments and fiscal policy have to do their part, that they cannot leave the responsibility in their hands. And if that was true in good times, much more during turbulence and doubts.

Despite this, the agreed role has only three vague points, such as that "the economic governance framework is a key pillar of the architecture of the Economic and Monetary Union, which supports the stability of the euro and the resilience of the euro area economy", something as obvious as it is irrelevant. Or two references to the need for "intensified collective efforts, involving policymakers and market participants across the Union, to advance the Capital Markets Union" and "continued efforts to complete our Banking Union", as it "has significantly strengthened the resilience of the EU banking system".

It is striking, but although the seams are seen with only a small turbulence the 27 do not seem to be in any hurry. "Today's turbulence has not changed the positioning, there has been no alteration in the conclusions previously raised," said Spanish President Pedro Sanchez, when asked if the leaders have addressed the situation of this Friday in the markets, when Deutsche Bank shares have fallen by 15 dragging the financial sector throughout the continent.

"We need to finalize the discussions on the Capital Markets Union, on the Banking Union. But not as a reaction to what happened in the US or Credit Suisse. We believe that the current supervision is strong enough, but we still have to take the final steps," agreed Dutchman Mark Rutte. It is no longer the US or Switzerland, or the indirect tails, but the pressure is internal and the weakest link, the sharks seem to detect, is German.

The situation is tense, but the reaction minimal. Everyone knows that it cannot be overstated, that any sign of panic would be interpreted in the worst possible way among investors and that as long as there are doubts the weakest links in relative terms, although not necessarily in absolute, will be the target. Hence the statements and the effort imposed to say that everything is fine That part is normal, logical even. But what is not happening is that no steps are taken to close the gaps. More than two dozen leaders took the floor in the economic debate, asked Lagarde, warned of the risk of loss of confidence and conspired to avoid mistakes. But at the same time, the communiqué approved today expressly says that work on the Banking Union must be done "in line with the Eurogroup's statement of 16 June 2022". Which translates means, ignoring, once again, any work to complete the third pillar of the Banking Union: the European deposit insurance fund.

The Banking Union has active the first two pillars, Supervision and Resolution, but a number of countries led by Germany have been preventing the third for a decade. They do not want to mutualize the guarantee of deposits. On the other hand, Italy, by a completely irrational and unbridled national reading, refuses to ratify the ESM Treaty, a mechanism that was reformed to give it more powers, once the era of bailouts is behind us. Donohoe called on Rome to take the remaining steps, but the issue is so toxic that Giorgia Meloni even decided to cancel the planned press conference to minimize the consequences of exposing herself to talk.

The reference of the Eurogroup last June is to throw in the towel, because that meant leaving aside the EDIS, the Deposit Insurance Fund, in favor of a reinforcement of national systems. Even the countries that have always claimed it, such as Spain, assume that it will not come out in the short or medium term. Germany, always worried about southern banks, delinquencies, exposure to sovereign debt, does not believe that we are at the right time to mutualize more risks. But the one who was harassed by questions and had to go out this Friday to defend his entities and ask that the pending steps be taken was his chancellor, Olaf Scholz. When asked about Deutsche Bank, he guaranteed that "it has fundamentally modernized and reorganized its business model and is a very profitable bank. There is no cause for concern." How ironic.

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