• The euro-crisis’ mismanagement has discredited the euro-area’s model of centralized economic governance, forcing the postponement of further integration plans until after Germany and France finish general elections in 2017.
  

• Marine Le Pen’s nationalist party has a non-negligible chance at victory in France, limiting Germany’s ability to increase risk sharing or deepen integration.
  

• At the same time, the stricter German position endorsed by Bundesbank, which calls for decentralized governance for the euro-area, will gain support, with “bail-ins” becoming the cure-all instead of “bail-outs.”
  

• Bail-ins will occur at either the banking resolution level or through sovereign bonds. Bank holdings of sovereign debt could become subject to quantitative limitations. Government bonds could face explicit restructuring. A country in crisis will no longer be bailed-out by other member states.
  

• What cannot be allowed is the avoidance of bail-ins through direct intervention by the State, as was the case with Banca d’Etruria and three other banks. The subsequent domestic bail-out of local banks would create a deadly bank-to-sovereign-debt loop of doom, which had made the euro-crisis unmanageable. The situation would worsen once the bail-out of states themselves are categorically ruled out.

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