Policy paper 220
No Escape from Politics: four tests for a successful fiscal instrument in the Euro area
The coming months will be a critical juncture for euro area reform. In this paper, Lucas Guttenberg and Johannes Hemker argue that a common fiscal instrument is necessary to improve the policy mix in the euro area.
To be successful, a fiscal instrument needs to pass four tests:
1. Macroeconomic significance
2. Politically sustainability, implying avoidance of salient blanket transfers
3. Effective governance via a legitimate political process
4. Fit with the rest of the EU’s structures
Lucas Guttenberg, senior research fellow at the Jacques Delors Institut – Berlin, and Johannes Hemker, guest author at the Jacques Delors Institut – Berlin, argue that fiscal instruments conceived exclusively for the purpose of economic stabilization will have difficulty passing these tests. Instead, marrying the need for stabilization with the benefits of European public goods provision could be a promising avenue.
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ÉVÉNEMENTS
EVENTS
Paris, 12 April 2019 – Session no.6 of the Académie Notre Europe: economic and monetary Union
Berlin, 19 September 2018 – Making Europe’s Economic Union Work
Paris, 20 June 2018 – Future Europe
Luxembourg, 20 June 2018 – The reform of the EMU: which social dimension?
Nicosia, 16 March 2018 – The political landscape of EMU reform
Sofia, 9 March 2018 – The future of the EU budget
Athens, 8 February 2018 – Athens’ days: Greece, paths for hope
Bruxelles, 25 January 2018 – Academy study trip to Brussels
Paris, 8 December 2017 – Academy: Political and Social Europe
Barcelona, 22 September 2017 – After the crisis, a push forward for the eurozone
Paris, 21 July 2017 – The future of the Eurozone and the Multiannual Financial Framework
Rome, 20 March 2017 – Completing economic governance and enhancing social cohesion
Lisbon, 24th January – High-level seminar on the future of the euro