Lessons and Challenges for CESEE Countries and a Modern Europe
Edited by Ewald Nowotny, Doris Ritzberger-Grünwald and Helene Schuberth
Chapter 16: Reflections on a public risk-sharing capacity for the euro area
This chapter discusses how to reconcile the need for a substantial reform of the framework of the European Union (EU) with the responsibility for country reforms. The issue is exemplified by means of a central fiscal risk-sharing instrument for the euro area (EA). The author argues that such a capacity would not necessarily create a super-state. It would be an overlay over the existing fiscal framework, completing it according to the distinct features of the monetary union as being a federation of single nation-states. Such a capacity would make the fiscal stipulations of the Maastricht Treaty more reliable. An assessment of various concepts by using the criteria of sovereignty, efficiency and effectiveness reveals the superiority of a stabilization fund against a full-fledged EA budget and a European Monetary Fund. With respect to the latter, it would unduly combine the stabilization and the disciplinary functions.
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