The objection of ‘moral hazard’ can be raised against all insurance: it incentivises more risk taking and a perverse need for more insurance. But insurance also provides ‘moral opportunities’ (Stone 1999) to the community of risk thus created, allowing them to govern risk collectively. Stone (1999) identified various social mechanisms that the availability of insurance promotes to explain the expansionary dynamic of insurance and solidarity. This article explores whether we can find these social mechanisms at work in reforms of the European monetary union, when the community of risk is formed by states rather than people. It takes the least likely case of a divisive institution of insurance, notably the European Stability Mechanism (ESM), to argue that even in this case we saw moral opportunities emerge. The ESM creates a community by protecting not only the member states affected by bond market panic but also those who guarantee the bailout.
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