Finally, the most important topic at the Brussels summit is of course the banking union. Governments and European Institutions are bargaining hard and they are in a phase of classic European brinkmanship. Every statement made by euro zone officials at this point should therefore be taken with a grain of salt. Even German resistance against a rushed decision could be seen in this light. However, any delay on the banking union would dash hopes by some countries that the European Stability Mechanism (ESM) could soon start recapitalizing banks directly and lift that burden from the already weighed down shoulders of sovereigns (i.e mostly Spain and Ireland). As we know, as long as there is no agreement on a banking union, the ESM will not be able to put more capital into banks directly.

The October 18^th summit should at least allow us to better understand whether Germany is still working towards an agreement on the banking union by the end of the year and what kind of agreement is likely to emerge. It is clear that if bank oversight only starts in 2014, as the head of the ECB Mario Draghi seemed to suggest just a few days ago in Japan, any direct bank recapitalization by the ESM could end up being pushed further into the distant future.

But we are not there yet.

The October summit is just the stepping-stone for the more important EU gathering in December. It is therefore still too early to establish whether complacency has once again infected European politicians.