The Logical Next Step for Europe's Integration

For the past year, euro-zone leaders have vowed to take steps to complete Europe's monetary union. The 19 countries share a single currency and a central bank, but they still lack all the necessary mechanisms to deal with major imbalances and shocks. While some members would like to have more fiscal transfers and a common safety net for the banks, others worry about subsidizing laggards and encouraging moral hazard.

The European Council at the end of June is widely seen as the last opportunity for some time to agree on an agenda of reforms. Afterwards, politicians will start to campaign ahead of the elections for the European Parliament next spring. With euroskeptic forces on the rise across the currency union, mainstream parties will have little appetite for negotiations over institutional reform in the run-up to the vote.