This article outlines various approaches to making the European monetary union more resilient to crises in future. Strengthening financial stability is a key part of this process, and should include steps to curb the risks that sovereign solvency problems pose to particularly systemically important banks, e.g. by reducing the preferential regulatory treatment of sovereign exposures in the medium term and eliminating it altogether in the long term. Equally, the negative impact of bank distress on sovereigns should be minimised. To achieve this, banks’ loss- absorbing capacity needs to be further strengthened. Where necessary, orderly resolution must be possible even for large, interconnected financial institutions without tapping public funds. In the area of fiscal policy, budgetary surveillance and the implementation of fiscal rules should be improved, and consideration given to an overhaul of the institutional framework. It also appears necessary to reinforce the disciplining effect of the financial markets on fiscal policy and to develop crisis management mechanisms which reduce moral hazard. Stability- oriented monetary policy crucially relies on its ability to resist pressure to step into the breach for over indebted banks or sovereigns.