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A fire department for the Euro area: reflections on a fiscal risk-sharing capacity

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  • Gabrisch, Hubert

Abstract

This essay investigates the necessity of and options for a central fiscal risk-sharing capacity in the Euro area. How can these aims be reconciled with the member countries’ responsibility for sound fiscal policy that also considers constitutional sovereignty, institutional efficiency and economic effectiveness? As a result, such a capacity can be created as an overlay over the existing fiscal framework without treaty changes and can complement it according to the distinct features of the monetary union. A stabilization fund dedicated to investment appears to be the best solution in light of the applied criteria.

Suggested Citation

  • Gabrisch, Hubert, 2018. "A fire department for the Euro area: reflections on a fiscal risk-sharing capacity," MPRA Paper 83965, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:83965
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    More about this item

    Keywords

    risk-sharing; EU budget; monetary union;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • F45 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Macroeconomic Issues of Monetary Unions
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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