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In the months since the term entered the EU's lexicon, efforts have been made to parse it or play it down. But the finance ministers of Finland, Germany and the Netherlands appear determined to keep it alive, and until June 2013, the deadline leaders have set themselves to resolve it, the issue will fuel uncertainty.
At its heart, it comes down to the difference between a eurozone country getting direct banking assistance from the region's €500 billion rescue fund, known as the ESM, or a country largely being left to fend for itself, with the market volatility and high borrowing costs that go with it.
In that respect, "legacy assets" are a critical link in the chain that binds governments to their banks -- the "vicious circle" that has dragged several states down with their lenders which policymakers are desperate to break. From the Finnish, Dutch and German point of view, any banking problems that have already come to light, or emerge before the European Central Bank takes over as the eurozone's single banking supervisor in mid-2014, are "legacy".
Finnish Prime Minister Katainen says existing banking problems in Ireland, Spain or elsewhere should remain chiefly the responsibility of their governments, and only in the future, after mid-2014, would the ESM, and ultimately European taxpayers, provide any backstop. The problem is that is not the way Italy, Spain, Ireland and others have interpreted the rule since it was drawn up at a summit of eurozone leaders in Brussels last June.
Part of the aim of Finland, Germany and the Netherlands is to make accessing the ESM so onerous that few countries will do it. If it is too straightforward, a string of states will apply and the scarce resources of the fund will be used up. Since the ESM is based on paid-in capital, and any direct recapitalisation of banks would require the transfer of capital, the fund, which will only have €80 billion in it at the moment rising, would be depleted very rapidly.