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Just Round the Corner? Pros, Cons, and Implementation Issues of a Fiscal Union for the Euro Area
Titolo Rivista: ECONOMIA PUBBLICA  
Autori/Curatori: Fabrizio Balassone, Sandro Momigliano, Marzia Romanelli, Pietro Tommasino 
Anno di pubblicazione:  2018 Fascicolo: Lingua: Inglese 
Numero pagine:  30 P. 5-34 Dimensione file:  283 KB
DOI:  10.3280/EP2018-001001
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The experience of a number of successful monetary unions and economic theory suggest that the euro area would benefit from the establishment of a supranational fiscal capacity, provided its design keeps the risk of moral hazard at bay. Institutional reforms prompted by the crisis (e.g., the European Stability Mechanism and the banking union) are introducing - though to a limited extent - elements of crosscountry risk sharing. Nevertheless, among European institutions there is a broad consensus that further steps are needed. Proposals to create a sort of rainy-day fund present major practical difficulties - associated, inter alia, with the uncertainty characterising the identification of shocks in real time. A more appropriate solution, consistent with how risk sharing operates in existing federations, may be to centralize specific public functions. One often-discussed possibility is the introduction of a common unemployment benefit scheme. We argue that consideration could also be given to the creation of a euro-wide, notional defined-contribution pension scheme.


Keywords: Fiscal union, intergovernmental transfers, risk sharing, European pension scheme
Jel Code: E42, E62, F15, F42, H77

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  1. Fabrizio Balassone, Sara Cecchetti, Martina Cecioni, Marika Cioffi, Flavia Corneli, Gabriele Semeraro, Economic Governance in the Euro Area: Balancing Risk Reduction and Risk Sharing in SSRN Electronic Journal /2016 pp. , DOI: 10.2139/ssrn.2863885

Fabrizio Balassone, Sandro Momigliano, Marzia Romanelli, Pietro Tommasino, in "ECONOMIA PUBBLICA " 1/2018, pp. 5-34, DOI:10.3280/EP2018-001001

   

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