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Why A Rebooted ESM Is Much Better Than An EMF

Marcello Minenna, (2018), “Why A Rebooted ESM Is Much Better Than An EMF“, Social Europe, 1 February

After the controversial European Monetary Fund (EMF) proposal by the European Commission of December 2017, it’s clear that the debate about the future role and structure of the European Stability Mechanism is not over. It will only end when the Euro area benefits from a unified government bond market with a single risk-free yield curve. This will not be easy to achieve while respecting what markets think of the sovereign risk of peripheral countries, but it can be done. The road is not, however, the EMF envisaged within a plethora of proposals from the European Commission. The first, fundamental step would be certainly to transform the European Stability Mechanism (the bailout fund established in 2012) but into an insurer of last resort for the public debt of all Eurozone countries.

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