Currency risks have turned into default risks: to prevent such defaults, the Eurozone area must have a strong financialsafety net

In recent years, Eurozone governments have developed safety nets to deal with the economic and financial crisis, but these have been developed in a trial and error fashion. Michiel Bijlsma and Shahin Vallee argue that we must build on the current European Financial Stability Facility and the European Stability Mechanism with further policies that will help to resolve the banking crisis, by issuing common debt (Eurobonds), and by promoting the idea of fiscal transfers within the EU.