It is now fairly clear that, in the long-term, a Union based on no risk-sharing will be vulnerable economically. Yet we also know that permanent transfers between countries cannot work politically. The only way to resolve this paradox is if, behind the “veil of ignorance”, risk-sharing is symmetric between countries.
This is only possible if all countries share sovereignty over structural reforms so that they have equivalent growth prospects and shock absorption capacity. And this will in turn be made even easier if deeper cross-border market integration, starting with an effective Capital Markets Union, reduces in the first place the need to share risk through public balance sheets.