Tug of War over Financial Assistance: Which Way Forward for Eurozone Stability Mechanisms?

This article analyses the development of financial assistance in Eurozone since 2010. It argues that reforms to instruments and bodies, notably European Financial Stability Facility, Mechanism, current Covid-19 recovery fund, are best explained by a re-occurring pattern negotiations between potential creditors debtors based on common interests national cost-benefit considerations. Building liberal intergovernmentalist approach, this shows how influenced step-by-step reform Eurozone. The threat stability served as constant factor encouraging member states expand deepen formula. Creditors’ considerations were key for retaining disincentives, limited liability debt, intermediary borrowing lending within financing design. However, back interests, able push an increase assistance, expansion into areas banking sector support, softening moral hazard elements more recent pandemic. Due creditors’ continuous insistence safeguards burden-sharing, outcomes repeatedly unable resolve difficulties at hand.