One institution, the European Central Bank (ECB)  is emerging from the euro debt crisis with its powers  substantially enhanced.   The ECB was set up in the mid-1990s as the first step toward a common currency.     Only since the crisis in 2009 has the ECB  used some of the more powerful grants of authority it received at its creation.  New proposals unveiled by the European Commission in September 2012 further extend the Frankfurt-based ECB’s domain. The ‘banking union’ legislative package, details of which are still subject to haggling in  the European Parliament and Council of Ministers, extends the ECB  mandate beyond the realm of monetary policy by putting it in charge of active supervision of  6,000 banks throughout the eurozone.  If the legislation passes, as looks likely, the ECB will issue operating permits for banks, investigate their activities, and potentially dismantle them.

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JPaulHorne3nov11bxEurope must be grateful to Greece for dramatizing: how the Euro is fundamentally flawed; how the Euro’s failure could cause a financial-economic disaster; and how European Union (EU) leaders must, despite all their differences and electoral setbacks, cooperate to avoid a Greek tragedy.

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By Federico Santi, editorial assistant at European Affairs

Reactions to the victory of François Hollande, the first socialist to hold the French presidency since 1985, have dominated the news for days as leaders and observers around the world assess the impact that his victory, along with the tumultuous election in Greece, will have on the way Europe will deal with the current economic crisis and the swirling debate on austerity versus stimulus for growth.

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On April 20, The European Institute welcomed The Honorable Vítor Constâncio, Vice President of the European Central Bank (ECB), to a discussion of the current challenges to European monetary policy.  Noting the ECB’s ability to adapt policies to shifting economic conditions as its significant strength, Vice President Constâncio forecast his institution’s continued success in reacting to the debt crisis and encouraged Eurozone member-states to become more proactive. The discussion was moderated by Stephen Gallagher, Managing Director and Head of Research for Société Générale in the Americas.

On April 20, The European Institute hosted Klaus Regling, Chief Executive of the European Financial Stability Facility (EFSF) for a discussion on the European debt crisis. Created barely two years ago, the European Financial Stability Facility (EFSF) has proven to be pivotal in the Eurozone’s efforts to safeguard financial stability and build a sustainable firewall to contain the effects of pressing sovereign debt among some member states. Mr. Regling assessed the progress made to date on Europe’s important reforms of economic and financial governance and the key challenges that still remain in achieving an effective resolution of the debt crisis. The discussion was moderated by Clay Lowery, Vice President of Rock Creek Global Advisors LLC.

Click here to read Mr. Regling's presentation