Shortly before the special EU summit on future EU finances, the head of the ESM bailout called for a crisis pool for the euro zone. “Fiscal capacity for macroeconomic stabilization in the euro area would be very useful,” said ESM chief Klaus Regling at the Europe conference in Munich last night.
Although this is controversial in the EU, it is a “key instrument” that is still missing in the economic and monetary union. This fund would be important to keep the euro zone stable. Because there is no stabilizing effect of a common tax and social policy, but also the possibility of a national exchange rate or monetary policy.
Regling added that there were several proposals on the table, such as the “rainy day fund” of the International Monetary Fund and the proposal for reinsurance of national unemployment insurance. He could also imagine shorter-term ESM loans.
In return for tough reform requirements, the ESM grants loans to euro states in need. However, the new fund should take effect earlier and prevent states from getting into financial difficulties when the economy slumps and having to call the ESM.