Was this a first step toward the mutualization of sovereign debts, and thus a radical step beyond Lisbon? Berlin was not going to concede anything of the sort.58 The entire deal hung in the balance until a Dutch participant with expertise in shadow banking suggested that the European Financial Stability Facility (EFSF) be incorporated as a private special purpose vehicle registered in the tax haven of Luxembourg. Eurozone governments would contribute capital on a country-by-country basis without assuming any overarching intergovernmental “European” commitment.
