ABSTRACT
Why did Euro Area member state governments decide to move to Banking Union (BU)—presented by proponents as a crucial move to ‘complete’ Economic and Monetary Union (EMU)—only in 2012, over twenty years after the adoption of the Maastricht Treaty? Why has a certain design for BU been chosen and some elements of this design prioritised over others? This chapter interrogates previous academic accounts on the move to and the design of EMU—neofunctionalist, intergovernmentalist and constructivist—evaluating their explanatory power with reference to BU. It is argued that the asymmetrical design of EMU generated a variety of spill-overs, and hence, a neofunctionalist drive to supranationalise control over bank supervision and financial support for banks as part of the so-called ‘completion’ of EMU. However, intergovernmental negotiations informed by moral hazard and domestic political economy concerns explain the asymmetrical design of BU agreed by national governments.
