Another lesson is that we need to secure consistency between the various institutions, rules and instruments which now shape our political economy. Thus, while the crisis was still unfolding, policymakers started to redesign the euro area. The most visible elements are a crisis management and resolution framework. There are five adjustment programmes for Greece, Ireland, Portugal, Spain and Cyprus.
They are jointly supported financially by the European Financial Stability Facility (EFSF) and the permanent European Stability Mechanism (ESM), plus the IMF. Such risk-sharing in turn requires a strengthening of the governance framework to counter the moral hazard inherent in such an insurance scheme. And this is precisely what we have seen over the last three years.