Europe is poised to agree a banking union that will mark the most significant pooling of national power since the birth of the euro.
European Union leaders meeting in Brussels on Thursday are expected to approve plans hammered out by their finance ministers after long negotiations.
The banking union is central to the eurozone's response to future financial crises.
The aim is to stop bank collapses from trashing national economies -- a fate Ireland suffered in 2010 -- and destabilizing the euro. By establishing a common set of rules for managing failing financial institutions, the EU hopes to avoid the kind of chaos seen in Cyprus this year.
So what exactly does it mean, and how will it work?
The first step, agreed a year ago, was to set up a common regulator for the eurozone's biggest banks.
A Single Supervisor: The EU agreed in December 2012 to give the European Central Bank responsibility for supervising the eurozone's biggest lenders. It will oversee some 85% of eurozone bank assets. Smaller banks will continue to be regulated by national authorities.
As supervisor, the ECB will able to force banks to raise more capital if needed. But before the central bank takes up its new role in November 2014, it wants a clearer picture of the risks the banks are carrying and their resilience to economic shocks.
To that end, it began reviewing the quality of the assets held by 128 banks across 18 countries, including major players such as Deutsche Bank (DB), Santander (SAN)and Unicredit (UNCFF)in October. The review will culminate in a series of stress testsnext year.
ECB President Mario Draghi hopes the tests will lift a cloud of suspicion hanging over European banks and encourage more lending to businesses and households.
A Single Resolution Mechanism: More robust supervision is supposed to make Europe's banks stronger, but future crises can't be ruled out.
Eurozone policymakers have been struggling to agree to the details of a mechanism for winding down failing banks, while minimizing the cost to taxpayers (in the form of government bailouts) and the impact on the economy and euro.
The European Commission had wanted the power to decide on when to begin closing a bank, but it now looks like the decision will be taken by a Single Resolution Board, including national authorities. The commission and finance ministers may still have a say.
A Single Resolution Fund: Unsurprisingly, perhaps, the hardest discussions have been over who pays for shutting down a failing bank.
Starting in January 2016, bank shareholders and creditors would bear the losses first. If that is insufficient for a given bank, authorities would draw on resolution funds sourced from the banking sector, not the taxpayer. All deposits under 100,000 euros would be protected.
The goal is to collect levies from eurozone banks to build up a single fund of 55 billion euros over 10 years. That looks like a drop in the ocean when compared with the 500 billion euros investors and governments have pumped into banks over the past five years.
In the meantime, national resolution funds will be gradually pooled. If they are exhausted, governments may be able to tap the ESM -- the euro zone's bailout fund -- asSpain did in 2012. 
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