State guarantees commonly function as financial panacea, allowing states to consolidate banking systems and create intergovernmental funds. Rules surrounding state guarantees were relaxed during the 2007-2008 financial crisis, allowing states to use them for financing small and medium-sized enterprises (SMEs) and workers' severance payments. Despite many multi-level interventions in many areas after the financial crisis, from international treaties to EU regulations, no specific regulation has been put in place to control state guarantees.This book addresses the subject of state guarantees in the Eurozone, and questions the stability of the instruments implemented so far by states and by the European Union. Using a methodology combining law and finance, it examines the tools adopted by European institutions and Member States in the EU's evolving institutional context, in order to evaluate the effectiveness of the tools themselves as well as of the new European institutional framework. It also addresses the unconventional measures adopted by the European Central Bank, its role as safeguard for European state guarantees and its interaction with the European Union and national courts. In From Saviour to Guarantor the authors suggest that the absence of specific regulatory interventions and the variety and vagueness of existing rules has resulted in state guarantees further destabilising public international finance.

IntroductionPART I: THE EU'S INSTITUTIONAL ACTION1. The EU Action To Face The Crisis1.1 EU Action In Support Of The Member States' Public Debt1.2 EU Action In Support Of The Banking System1.3 Eurostat Public Contingent Liabilities1.4 Differences Between EU And US Actions2. State Guarantees And State AidPART II: THE FINANCIAL VALUATION OF A GUARANTEE CONTRACT3. The Defaultable Guarantee Contract.3.1 The Guarantee Contract And Credit Derivatives Market3.2 The Relevant Issues.4. Valuation Under A Standard Model.PART III: THE STATE GUARANTEES IN THE EUA) State Guarantees For The Safeguard Of The Euro5. Guarantees In Favour Of The European Stability Mechanism (ESM)5.1 The Financial Scheme5.2 Main Features Of The Guarantees6. Effects Of The Guarantees6.1 Valuation And 'Model Risk'6.2 The Lack Of Effective Sanctioning Instruments6.3 Different Sovereignties For Eurozone Member States6.4 The ECB And The Lever Of ArchimedesB) State Guarantees For The Stability Of The Banking System7. The State Guarantees To Cover Bank Debt7.1 The Financial Scheme7.2 Main Features Of The Guarantees8. Effects Of The Guarantees8.1 Legal Guarantee Fee And Market Price8.2 Moral Hazard Effects8.3 Distortions In Banking Competition8.4 Member State Guarantees And EU CoordinationPART IV: INNOVATION AND CRISIS-FIGHTING MEASURES IN THE EU9. The Instruments That Triggered The Crisis In 2007-20089.1 The 'Path' Of Risk: From Private Individuals To Banks9.2 (Continued): From Banks To Markets9.3 (Continued): From Markets To States9.4 Cultural Sustainability Of Innovation In Anti-Crisis Public Finance10. The ECB's Unconventional Measures Facing The Challenge Of Markets And National Courts10.1 Characteristics Of The Main Unconventional Measures10.2 The Scope Of The Measures As Outlined By The ECB And By The Case Law10.3 Application Of The Constraints Set By The Bverfg For Omts To Other Unconventional MeasuresConclusions