“EU struggles to unlink banks from states as summit looms,” headlines the Financial Times describing how the concept of a European banking union, which would completely sever the link between imploding banks and national governments, has crashed into the reality of “nitty-gritty political negotiation” and now evolved into simply a “diluting” of such links.

Ahead of a head of a state and government summit next week, which will focus on economic policy, the official line is that lack of progress on banking union is due to logistical issues, but the FT’s Brussels bureau chief Peter Spiegel adds –

Privately, other officials acknowledge much of the delay can be laid at the feet of complacency that has settled in as financial markets have cooled, as well as the gradual move into the season of the German election campaign, which could prevent any major decisions until after September’s vote.