In a hard-hitting report on the Euro area, the IMF has called on governments to show a shared and unequivocal commitment to deeper integration in the Euro area. This would include the creation of a banking union to deal with problem banks at a European level, structural reforms to raise growth, and more fiscal integration, including a common debt and stronger governance. It says "the deepening of the crisis suggests that its root causes remain unaddressed. Economic and Monetary union lacks the basic tools that can break the adverse feedback loops between sovereigns, banks and the real economy". It also says the Euro area lacks ambitious policies to boost economic growth. In making the case for a banking union, the IMF says the Euro area is in an uncomfortable and unsustainable halfway point. "While it is sufficiently integrated to allow escalating problems in one country to spill over into others, it lacks the economic flexibility or policy tools to deal with these spillovers". It says a deposit guarantee scheme, a strong regime for resolving failing banks, and a single bank supervisor for the whole Euro area are the essential parts of a banking union. It says the costs of resolving failing banks should be paid by a levy on the banking industry, with the use of ESM funds in the short term. The IMF also says Euro area states need to pool sovereignty further to create a fiscal union. This would have the financial resources to share risk and give financial support to states that were hit by economic shocks. But this would require countries giving up some powers over budget policy, and would probably mean some form of tax authority over the whole region by a centralised authority, which would also have supervisory power over member states to make sure they stick to agreed budget policies. Recognising this would mean a big change to the European Union as we know it, the IMF says a clear roadmap of changes and public debate would help. The report states: "Ultimately helping countries smooth adjustment to adverse shocks might require large resources at the centre. But reaching this point will imply a form of political union with a substantial reorientation of sovereignty and burden sharing, requiring changes to the EU treaties and national constitutions".