Monetary solidarity in Europe: can divisive institutions become ‘moral opportunities’?

Abstract

How does the inherent norm of integration, notably to share risks among its members in good faith, become a self-sustaining practice? I address this question generally and for a critical case of a divisive institution, i.e. the evolution of sovereign bailout funding in the Euro Area since 2010. Community building between states is a potential outcome of solidaristic practices, reinforced by positive feedback processes. Inspired by Deborah Stone’s [Stone, D. A. (1999). Beyond moral hazard: Insurance as moral opportunity. Connecticut Insurance Law Journal, 6(1), 12–46] work on insurance, I demonstrate that there are social mechanisms at play that favour the secular expansion of risk sharing between states.