These outcomes, in turn, can promote (over-and-above what may have been attained on the basis of the elimination of exchange-rate uncertainty among separate currencies) reciprocal trade, economic and financial integration, and the accumulation of knowledge. Greater trade integration can increase growth by increasing allocative efficiency and accelerating the transfer of knowledge.
The European Stability Mechanism (ESM) will replace the EFSF in 2013. Last month the European Council agreed that the ESM will have an effective lending capacity of EUR 500 billion. By exception, the fund will be able to buy sovereign bonds in the primary market.