The reason for this is that the more diversified the sources of national income and the easier it is to borrow abroad, the less consumption and investment need to follow fluctuations in national output. Hence, national consumption and  BIS Review 76/2008  5  investment levels can be insulated from domestic macroeconomic shocks via cross-border risk sharing.
Second, financial integration strengthens the stability of the euro area financial system – and of the macro economy in general. Basically, in a well-integrated financial system, risks tend to be more diversified on a cross-border scale which should lead to financial intermediaries, markets and infrastructure becoming more resilient to idiosyncratic shocks.