I think the staggered time horizon for triggering European countries' participation is a good selling point for getting buy-in among the more stable northern countries. I believe the plan is a decent stalking horse for full Europe-wide integration of bank regulation. I am not clear on whether the regime will include penalties for countries that opt-in but then refuse to comply with requests to help out a failed bank in another country. Let's say Greece opts in, thinking that making a tiny contribution to a pooled resolution fund is a small price to pay for obtaining further sovereign debt bailouts. If some Spanish banks fail and Spain reaches the limit of its own portion of the Single Resolution Fund, what would happen to Greece if it refuses a request from Brussels to contribute more of its own money? Would the Board of the Single Resolution Authority assess some penalty for Greece? Would it ask Brussels to expel Greece from the eurozone? Or would it turn to Germany and the Netherlands for more than their fair share of bailout cash?
The parties to this proposed treaty have a lot to talk about in the next few weeks. Details of the mechanisms for pooling and risk management are far less important than the willingness of Germany to backstop everything if those mechanisms fall apart. Germany's appetite for such risk will in turn depend on the credibility of the dollar swap lines the Fed has extended, and whether the world's currency traders will still support the dollar if the ECB triggers those swaps.