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The exception has become the rule: the European rescue fund ESM is now joined at the hip to the European Monetary Union. Setting it up to get eurozone countries that cannot or do not want to play by the rules of the common currency out of their own messes, the euro-rescuers have defied not only the promise of the founding fathers, but also the ban on bailouts enshrined in the EU treaties. That shifts the power structure and the dynamics of the monetary union, probably not for the better.
With the mighty euro funds there now begins a new chapter in the history of the monetary union. A highly politicised crisis fund has now joined the no longer quite so politically independent European Central Bank. Politicians mean to wield the two institutions – ECB and ESM – to curb the influence of the financial markets. The varied credit ratings of the euro countries should no longer be expressed in corresponding interest rates. That makes going into debt cheaper. It’s a reckless path: it may facilitate reforms in the crisis countries. However, it may also – and this is the voice of experience speaking – tempt them to live off credit for ever.
Original article: "Kommentar zum ESM: Der Euro-Fonds", © Frankfurter Allgemeine Zeitung GmbH 2012