And a strong resolution framework ensures that very little public risk-sharing is actually needed when a crisis hits, as the costs are primarily born by the private sector. Nevertheless, it is a fact of economic life that the risk of significant downside economic shocks can never be fully eliminated. This is why an effective crisis management framework remains indispensable.
There is thus merit in strengthening the role of the ESM in managing crises, provided that governance arrangements are duly reviewed with a view to integrating them into the federal set-up of the EU.