setting up these institutions? presumably it helped a little that binding cooperation is fair and intellectually satisfactory. but a much more decisive factor has probably been that, in economic terms, it is far more efficient for everyone, and the alternative is political chaos, with anarchy, shifting and random alliances and eternal conflicts, not least between large countries. seen from our perspective, as a small country, rule - based cooperation has to some extent been challenged by institutions with the major powers as members – such as the g7, g20, fsb ( financial stability board ) and basel committee – for they do not operate with treaty rules and equal treatment, and furthermore we are not invited to join them. on the other hand, they are more concerned with coordination and advice rather than direct decision - making. the eu and the ecb sit at the table and serve as buffers in relation to implementation. and perhaps it is just as well that the largest countries meet up in smaller forums and have an opportunity to avoid frustrations they may have in the rule - based institutions where they need to negotiate with many other large and small countries. it is more serious if large countries withdraw from existing agreements, prevent the rule - based institutions from working efficiently or go solo and test the limits of or act in direct contravention of the written or unwritten rules of the institutions. or if medium - sized and small countries individually get the notion that they will be able to decide more themselves by withdrawing from the institutions. in this case they face a difficult choice. either they must follow the rules laid down by others – without having any influence on them. or they must accept the loss of prosperity and the hassle imposed on the government, businesses and citizens from opting for isolation and their own rules, plus harvest possible windfalls that may come in the form of bilateral agreements. unfortunately, there are topical examples of both situations, and in some countries there is pressure to follow suit. this also poses a risk to danish prosperity and influence. it is important to keep the value of broad international co - side 3 af 9 operation in mind, also when focusing ( more narrowly ) on issues such as the banking union, and the implications if denmark at some point decides to join it. the development of the banking union the banking union is not fully developed and is not likely ever to be. there will always be new issues and proposals to consider. but the largest and most important pieces have fallen into place with the single supervisory mechanism and the

of banks to operate in other member states. stronger supervisory powers in terms of capacity, depth, methods and the opportunity to take a broader perspective. better management of cross - border financial activities. greater credibility in relation to the bail - in rules, and greater certainty that failing banks will be treated in the same way. and like all other international cooperation for a small country : influence on rules and practices that must, in effect, be observed in any case – including having a spokesperson in institutions such as basel and the fsb, where we are not invited to sit at the table ourselves. and after all, the vast majority of danish banks are of a size which would place them under direct danish supervision, also in a banking union. but based on the single supervisory practice – which has its advantages. as you will have understood, the insurance element is not at the core of the banking union. an insurance element does exist for use in extreme situations with failing banks, but otherwise its role will be very limited. so the insurance element and its counterpart – fear of liability for problems incurred by banks in other member states – are neither key arguments for participating in nor remaining outside the banking union. i am not claiming that transfers between the eu member states do not and should not exist. transfers have taken place for many years, via the eu budget, and the amounts are considerable. several member states receive up to 3 per cent of their gdp on the basis of a number of objective and structural criteria. so it would not be new or exceptional if other elements of the cooperation were also to include such transfers. but neither the euro project nor the banking union have involved or envisage transfers between member states to any substantial degree. and in practice, the institutions are systematically designed to minimise the likelihood of such transfers. that will probably characterise also future developments within this area. side 9 af 9