|
|
|
|
|
|
by ZeroGravitas
902 days ago
|
|
|
Or a Euro with greater fiscal union. This is an article that explores one way to achieve this given political reality, that the "North" would be sending money to the "South" if implemented, yet both North and South benefit from the Euro system continuing: https://www.cambridge.org/core/journals/european-review/arti... > An EU Fiscal Union is being discussed as a way to avoid future euro-crises and guarantee the stability of the euro. So far, however, it has proved politically impossible, as EU countries are unwilling to give up their sovereignty on fiscal policy. This article develops a bargaining model that sheds light on how fiscal pooling could become politically acceptable. The model differentiates between the ‘South’ (net beneficiaries) and the ‘North’ (net payers). We find that fiscal pooling should be done via a combination of the fiscal instruments with the highest fiscal multipliers. Instead of a single Fiscal Union, we therefore propose a combination of fiscal pooling instruments which, together, add up to the sufficient level of fiscal integration. |
|
|
The creation and response to the sovereign debt crisis shows that this won't happen.
It will require a political union as well. German taxpayers aren't going to pay for Greek pensioners.