EU Closer to Bank Union Fails to Help Cyprus in Crisis

On the same day Cyprus’s parliament rejected a European Union bailout involving a tax on deposits, political leaders in the region reached a deal bringing the euro zone one step closer to a banking union.

The agreement to accept a common supervisor was the result of an idea hatched in Brussels in June to enable the direct use of EU funds to recapitalize banks without adding to a government’s debt. It was supposed to help countries such as Cyprus, whose failing banks threaten that nation’s solvency.