It started well. At 4am last Thursday morning bleary-eyed finance ministers from across the European Union emerged from the meeting of Ecofin to announce that they had reached a deal to clear the first hurdle to a full European banking union, with agreement to make the European Central Bank the single supervisor of the European banking sector from 2014.

The compromise deal, which will see the ECB act as direct supervisor only of banks with 30 billion euros or more of assets, or representing 20 per cent of a state’s GDP – just 200 of the 6,000 banks operating in the EU – is the easiest part of the problem to solve and could still be derailed by the European parliament, who are not happy about the lack of democratic oversight of the ECB. Before the ink had even dried on Thursday’s agreement the debate began about the next two phases of the banking union – a process to wind up failing backs and a common deposit guarantee scheme. Both will be costly and politically toxic to some and it is likely that no agreement will be reached on either anytime soon, certainly not before federal elections due in Germany next autumn.

Unfortunately, at the summit which started later on Thursday, EU leaders seem to have decided that the announcement on banking supervision was quite enough excitement for one week and put off virtually all decisions until next summer. Proposals to be discussed on a eurozone budget and further economic integration were watered down ahead of the meeting and put off for another six months when leaders next meet.

It seems that EU leaders only feel compelled to act when market pressures force their hands. With relatively calm markets following reassurances from ECB chief Mario Draghi that he would do ‘whatever it takes’ to save the euro and the deal on banking supervision, the pressure is off for the time being.

There was no discussion at all of the European commission proposals on tackling youth unemployment. In my view, this is the single biggest issue currently facing Europe as youth unemployment hits 5.5 million. The commission’s proposals included at its core the introduction of a Youth Guarantee into national legislation across all member states, something I wrote about before the summit.

European parliament president Martin Schulz got it exactly right in his speech to EU leaders at the start of the summit: ‘Treaty amendments which will take effect in two or three years’ time will not help to create a single job for a young person today. Our shared responsibility must be to ensure that the crisis does not rob young Europeans of their future.’

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Kevin Peel is a councillor on Manchester city council and tweets @kevpeel

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