Apart from the expected approval of the ESM (permanent European bailout fund) by the German Constitutional Court, investors are awaiting details on the banking union that looks to place the European Central Bank (ECB) as the primary supervisor of Eurozone banks, and which will include other European Union (EU) financial institutions in countries that wish to participate.

The new integration plan is expected to grant the ECB power to monitor all banks and establish a fund to wind them down if necessary. Beyond that, leaders are looking to establish a Eurozone-wide deposit guarantee to calm nervous citizens and avoid runs on the banks in times of crisis. It's still unclear whether this would replace national programmes already in place.

European Commission president José Manuel Barroso is expected to outline the plan in his State of the Union address on Wednesday morning. In any case, individual member states would still need to approve the proposal.

JM

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