Mechanisms of financial stabilisation

One of the measures that the euro area Member States took in their
attempt to combat the Eurozone financial and debt crisis was to give
financial assistance to the crises-ridden states. The purpose of such
assistance was to safeguard the financial stability of the euro area as a
whole. Thus, these mechanisms can be referred to as financial stabilisation
mechanisms.
The purpose of this chapter is to provide an overview of the different
mechanism of financial stabilisation and their constitutional significance.
Due to the fact that there are actually several mechanisms, the discussion
will focus mainly on the European Stability Mechanism (ESM), which
replaced the earlier temporary mechanisms – namely the European
Financial Stabilisation Mechanism (EFSM) and the European Financial
Stability Facility (EFSF). Out of the various constitutional questions that
such mechanisms give rise to, this chapter will emphasise those issues
that relate to the asymmetrical structure of the Economic and Monetary
Union (EMU). The choice to focus on issues that relate to the asymmetry
of the EMU stems from the fact that these questions are politically most
contentious, which also meant that addressing them proved legally
difficult.