Creating a banking union is crucial for euro – World Bank director

European banking should brace itself for deeper integration as a fundamental issue to maintain the eurozone’s unity, Mulyani Indrawati, Managing Director of the World Bank, told RT at the St. Petersburg Economic Forum.

“If you want to maintain the euro you also have to address the decision on banking and call for banking union there,” Mulyani Indrawati said. “The consequence should be the fiscal union and then it’s going to be a political union.”

According to Mulyani, the European authorities missed a lot of time addressing the problems of the eurozone’s periphery, but failed to focus on the region’s unity. “All good news has a short life such as a bailout for Spanish banking or the outcome of the Greek election. It cannot be satisfied before the three issues are addressed,” she warned.

However, the question of European unity depends not only on the authorities, as ordinary people in countries doing better are not happy about bailing out the others. “It’s going to be a very difficult fundamental political choice for the people,” Mulyani pointed out. “If they see in the past decade a benefit of having Europe together with the currency bringing more integration, then people are going to support it.”

Meanwhile the other countries should also take joint measures to support Europe, as the eurozone’s crisis is going to echo outside the region, especially in the developing countries, according to Melyani. “It will be a collective responsibility,” she stressed.