Banking union plans irk Czech Republic

The European Union’s single currency zone may have avoided collapse by green-lighting key stabilisation and oversight mechanisms, but an ongoing debate regarding the feasibility of a joint European banking union could draw non-euro zone countries, including the Czech Republic, into the opposing side of the EU’s integration process.

With Greece unable to get another tranche from the international loan, Spain begging for billions to save their banks, Italian bond premiums climbing mountain high and Germany reluctant to commit further efforts to resuscitate the ailing single currency zone, the euro teetered on the edge of a precipice as EU leaders returned from their holidays in early September, prompting several key proposals that may return confidence to hesitant markets and bring the euro back to life.

Leading the effort was European Central Bank head Mario Draghi, who announced in early September the ECB’s willingness to buy unlimited amounts of bonds of troubled euro zone countries under certain conditions. Markets rallied in reaction to the news. However, German Bundesbank President Jens Weidmann flatly opposed the idea, claiming “such a policy is too close to financing states by printing money.”

Read the full story in The Prague Post.

(Photo of Czech prime minister Petr Nečas by European Council via