Should Europe Become a Fiscal Union?
AbstractMoving towards a fiscal union does not address the problems of divergence in Europe. Given cultural heterogeneity and diverse preferences, fiscal policy should remain under national sovereignty while important regulatory power is assigned to the Union. The paper argues that more credible fiscal rules combined with tighter surveillance reduce negative policy spillovers. A better capitalized banking sector imposes more market discipline with sovereign risk-premia. Institutional lending by the ESM (European Stabilization Mechanism) to distressed countries is subject to strict conditionality and will impose structural adjustment that was neglected ex ante. Further reform seems necessary to strengthen the financial capacity and institutional independence of the ESM and to impose tighter regulation and more ambitious recapitalization of European banks to contain cross-country contagion on financial markets. Such reform should prevent or at least much reduce the negative consequences of national decision making on other member countries and would in turn support the political goals of establishing peace and harmony in Europe.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Ifo Institute for Economic Research at the University of Munich in its journal CESifo Forum.
Volume (Year): 13 (2012)
Issue (Month): 1 (04)
Entwicklungskonvergenz; Finanzpolitik; Internationale wirtschaftspolitische Koordination; Eurozone; Europäische Wirtschafts- und Währungsunion; EU-Staaten;
Other versions of this item:
- F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Martin S. Feldstein, 2011. "The Euro and European Economic Conditions," NBER Working Papers 17617, National Bureau of Economic Research, Inc.
- Hans-Werner Sinn & Timo Wollmershäuser, 2012.
"Target loans, current account balances and capital flows: the ECB’s rescue facility,"
International Tax and Public Finance,
Springer, vol. 19(4), pages 468-508, August.
- Hans-Werner Sinn & Timo Wollmershaeuser, 2011. "Target Loans, Current Account Balances and Capital Flows: The ECB’s Rescue Facility," NBER Working Papers 17626, National Bureau of Economic Research, Inc.
- Hans-Werner Sinn & Timo Wollmershäuser, 2011. "Target Loans, Current Account Balances and Capital Flows: The ECB’s Rescue Facility," CESifo Working Paper Series 3500, CESifo Group Munich.
- Sinn, Hans-Werner & Wollmershäuser, Timo, 2012. "Target loans, current account balances and capital flows: The ECB’s rescue facility," Munich Reprints in Economics 19556, University of Munich, Department of Economics.
- Benedicta Marzinotto & AndrÃ© Sapir & Guntram B. Wolff, 2011.
"What kind of fiscal union?,"
- Beetsma, Roel & Giuliodori, Massimo, 2009.
"The Macroeconomic Costs and Benefits of the EMU and other Monetary Unions: An Overview of Recent Research,"
CEPR Discussion Papers
7500, C.E.P.R. Discussion Papers.
- Roel Beetsma & Massimo Giuliodori, 2010. "The Macroeconomic Costs and Benefits of the EMU and Other Monetary Unions: An Overview of Recent Research," Journal of Economic Literature, American Economic Association, vol. 48(3), pages 603-41, September.
- Andr� Sapir, 2011.
"European Integration at the Crossroads: A Review Essay on the 50th Anniversary of Bela Balassa's Theory of Economic Integration,"
Journal of Economic Literature,
American Economic Association, vol. 49(4), pages 1200-1229, December.
- André Sapir, 2011. "European Integration at the Crossroads: A Review Essay on the 50 th Anniversary of Bela Balassa’s Theory of Economic Integration," ULB Institutional Repository 2013/174292, ULB -- Universite Libre de Bruxelles.
- De Grauwe, Paul, 2011. "Governance of a Fragile Eurozone," CEPS Papers 5523, Centre for European Policy Studies.
- ,, 2009. "Economics of Monetary Union," OUP Catalogue, Oxford University Press, edition 8, number 9780199563234, September.
- Michael D. Bordo & Agnieszka Markiewicz & Lars Jonung, 2011. "A Fiscal Union for the Euro: Some Lessons from History," NBER Working Papers 17380, National Bureau of Economic Research, Inc.
- Feldstein, Martin S., 2011. "The Euro and European Economic Conditions," Scholarly Articles 9949289, Harvard University Department of Economics.
- Wallace E. Oates, 1999. "An Essay on Fiscal Federalism," Journal of Economic Literature, American Economic Association, vol. 37(3), pages 1120-1149, September.
- C. Randall Henning & Martin Kessler, 2012.
"Fiscal federalism: US history for architects of Europe's fiscal union,"
Essays and Lectures
- C. Randall Henning & Martin Kessler, 2012. "Fiscal Federalism: US History for Architects of Europe's Fiscal Union," Working Paper Series WP12-1, Peterson Institute for International Economics.
- Bargain, Olivier & Dolls, Mathias & Fuest, Clemens & Neumann, Dirk & Peichl, Andreas & Pestel, Nico & Siegloch, Sebastian, 2012. "Fiscal Union in Europe? Redistributive and Stabilising Effects of an EU Tax-Benefit System," IZA Discussion Papers 6585, Institute for the Study of Labor (IZA).
- repec:ese:emodwp:em6-12 is not listed on IDEAS
- Olivier Bargain & Mathias Dolls & Clemens Fuest & Dirk Neumann & Andreas Peichl & Nico Pestel & Sebastian Siegloch, 2012.
"Fiscal Union in Europe? Redistributive and Stabilising Effects of a European Tax-Benefit System and Fiscal Equalisation Mechanism,"
1222, Oxford University Centre for Business Taxation.
- Olivier Bargain & Mathias Dolls & Clemens Fuest & Dirk Neumann & Andreas Peichl & Nico Pestel & Sebastian Siegloch, 2013. "Fiscal union in Europe? Redistributive and stabilizing effects of a European tax-benefit system and fiscal equalization mechanism," Economic Policy, CEPR & CES & MSH, vol. 28(75), pages 375-422, 07.
- Neumann, Dirk & Bargain, Olivier & Dolls, Mathias & Fuest, Clemens & Peichl, Andreas, 2012. "Fiscal Union in Europe? Efficiency, Equity and Stabilizing Effects of an EU-Wide Income Tax," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 66063, Verein für Socialpolitik / German Economic Association.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Klaus Wohlrabe).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.