|Willem Buiter, Citis chief economist|
Echoing this sentiment, Zsolt Darvas, research fellow at Bruegel, a Brussels-based economic think-tank, argues that the Cyprus crisis will accelerate the EUs banking harmonization efforts. A single supervisory mechanism and a common resolution framework are now more important than ever and rightly on top of the political agenda, he says. ECB governor Mario Draghi last month called for the common eurozone resolution framework to be introduced in 2015 rather than 2018. Nevertheless, German chancellor Angela Merkels rejection of a unified European deposit insurance - at least for the foreseeable future on April 25, highlights the holes in the EU banking union plan and how the solvency of national deposit guarantees will remain exclusively tied to the sovereign, laying bare the financing risks of bank rescues in the periphery.