One money, two markets? EMU at twenty and European financial market integration

This contribution combines neo-functionalism and historical institutionalism to understand the implications of differentiated integration in Economic and Monetary Union (EMU) and Banking Union (BU) for the single market in financial services in the European Union (EU). From the 1980s, the relaunch of the Single Market and monetary integration in the EU were presented by the supporters of EMU as mutually reinforcing, as in the logic of the Commission’s Report ‘One Market, One Money’. Initially, EMU appeared to reinforce financial integration, especially in the Euro Area banking sector, even though EMU was a case of differentiated integration in the EU. Subsequently, the incomplete EMU triggered the sovereign debt crisis, which undermined financial market integration and was addressed through the establishment of BU, which reinforced differentiated integration. Both EMU and BU have negative implications for the ‘singleness’ of the single market in financial services, potentially resulting in ‘One Money, Two Markets’.