But there will always be a risk that prevention will fail and that countries will be confronted with debt crises. In such circumstances, it is essential to have in place a predictable framework for managing crises that contributes both to financial stability and the correct pricing of risk.
In this context, the Eurogroup agreed on 28 November on the contours of a permanent European Stability Mechanism (ESM) for the euro area based on the existing European Financial Stability Facility (EFSF). The ESM will be capable of providing liquidity support for countries in financial difficulties, subject to an adjustment programme with strong conditionality.