José Manuel Barroso, president of the European Commission, commented in an interview with the FT this week that all 27 EU countries should submit their big banks to a single cross-border supervisor as part of a banking union. He said that the EU needs to take “a very big step” towards deeper integration if it is to learn lessons from the sovereign debt crisis. Mr Barroso thought that the changes, which would also include an EU-wide deposit guarantee scheme and a rescue fund paid for by levies on financial institutions, could be achieved in 2013 without changes to existing treaties.

The UK chancellor, George Osborne does not want Britain to be part of any banking union which would make taxpayers liable for recapitalising eurozone banks. However, he thinks that the union is desirable, so long as Britain is not obliged to take part. Mr. Barroso considered that it would be right to allow Britain to opt out of the banking union, so long as it did not block the union’s progress.

The Commission published a memorandum on the proposed banking union on 6 June 2012. Memorandum on banking union.