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Anti-fragmentation: an incomplete diagnosis and wrong solution

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  • Marek DABROWSKI

Abstract

The euro area suffers from excessive public debt, which is the primary cause of the so-called fragmentation. It should be remedied by fiscal consolidation instead of the quasi-fiscal activities of the European Central Bank, which are inconsistent with its legal status, compromise its independence and undermine its price stability mandate. When targeted market intervention is necessary, it should be provided by the European Stability Mechanism. This paper was provided by the Policy Departmentfor Economic, Scientific and Quality of Life Policies at the request of the Committee on Economic and Monetary Affairs (ECON) ahead of the Monetary Dialogue with the ECB President on 26 September 2022.

Suggested Citation

  • Marek DABROWSKI, 2023. "Anti-fragmentation: an incomplete diagnosis and wrong solution," CASE Reports 0507, CASE-Center for Social and Economic Research.
    • Handle: RePEc:sec:report:0507
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    References listed on IDEAS

    as
    1. Alex Cukierman, 1998. "The Economics of Central Banking," International Economic Association Series, in: Holger C. Wolf (ed.), Contemporary Economic Issues, chapter 3, pages 37-82, Palgrave Macmillan.
    2. António Afonso & Frederico Silva Leal, 2019. "Fiscal multipliers in the Eurozone: an SVAR analysis," Applied Economics, Taylor & Francis Journals, vol. 51(51), pages 5577-5593, November.
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    Keywords

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    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F45 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Macroeconomic Issues of Monetary Unions
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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