The European Commission’s plans for a banking union are facing fierce headwinds. Without such a scheme it will be very tough to recapitalize struggling banks, stabilize financial markets and resolve the euro zone crisis. There’s consensus that the project is necessary and will happen — and European Union political leaders did agree to it in June. But resistance from the wealthiest northern European countries, with ­German savings and co-­operative banks leading the charge, will likely lead to both delay and compromise, notwithstanding the European Commission’s decision earlier this month to move forward. In September the Brussels-­based commission outlined three core elements of the union for the EU’s 6,000 banks. The first step, approved by European leaders on December 13, is the single supervisory mechanism (SSM), a unified banking regulator under the European Central Bank. Supervision is scheduled to cover all relevant banks by January 2014. In a December 3 statement the....

Read More: European Commission · euro zone crisis