And in contrast to the US, common shocks can have asymmetric effects due to different levels of public debt, as we saw during the crisis. Consequently, IMF analysis finds that, while business cycles have become more synchronised during the euro period, their amplitude across euro area countries has diverged since the crisis.
[22] So, to address this, there needs to be insurance across euro area countries, and such insurance is also likely to be highly effective, perhaps even more so than in the US. [23] Progress in this area is much less advanced, however. Only around 25% of local shocks are smoothed through financial markets in the euro area.