A genuine EMU needs a comprehensive approach to tackle the vicious circle of excessive private sector indebtedness, unsustainable sovereign debt and banking sector weakness. The EU lacks a global framework which fills in the gaps in a fully integrated financial services policy, with a single supervisory mechanism for banks and a single rule book to govern all financial institutions. It also needs to complete and implement the more effective mechanisms put forward to prevent and correct unsustainable fiscal policies and economic imbalances. Better coordination of tax policies will also be crucial. The progress made through the European semester has also not yet reached its potential in terms.
