The financial crisis in the Eurozone has posed a serious challenge to the viability of the existing legal structure, which serves as the grounds for the European Union’s (EU) Member States’ economic cooperation. The EU’s financial and banking institutions and its decision-making bodies’ failure to predict, and to prevent this economic crisis, has led the Union’s decision-makers to conclude that they must reinforce the supervisory powers of the European Central Bank (ECB). The consequent establishment of the Single Supervisory Mechanism has increased ECB’s expectations from the administration of the European banks. However, as in any attempt at crisis management, the EU Member States face an important question: are the proposed solutions compatible with the existing structures that were put in place by current treaties? On the one hand, the European financial market’s vulnerability to each Member State’s crises indicates that it requires a higher degree of centralization in supervisory matters. On the other hand, all Member States, including the non-Eurozone EU Member States, reasonably expect that the ECB’s powers be limited to the matters in which they have agreed to relinquish their sovereign rights, and that they participate effectively in the decision-making process. The final resolution establishing the Single Supervisory Mechanism seems to meet some of these expectations. However, questions about this mechanism’s compatibility with existing treaties, as well as with EU standards for the ECB’s accountability, remain far from being fully resolved.
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