From the fiscal backstop to the establishment of a deposit guarantee scheme: The road towards a fully-fledged eurozone

The paper addresses the issues of the completion of the European Banking Union and the so called "deepening" of the Economic and Monetary Un-ion. The proposals on the establishment of a European Monetary Fund seeks to ful-ly absorb the ESM within the institutional architecture of the economic governance of the EU, thus enhancing the decision-making role of the Council and extending the capacity of the fund to provide support to the SRB in case of systemic banking crises. Alongside this ambitious and controversial project, negotiations on the pro-posal submitted by the European Commission to complete the Banking union through the establishment of a deposit insurance scheme as a complement to the SSM and the SRM are still underway, following the political auspice to pursue a further reduction of banks' balance sheet credit risks-an overwhelming legacy of the global financial crisis. By providing a review of the rationales of the two pro-posals, the paper discusses the features of the latter, underlining the key interlink-age existing between the EMU and the EBU and the need to jointly address the ex-isting gaps.