Contents

Foreword

Introduction
Jean Pisani-Ferry and Jeromin Zettelmeyer

The 7+7 Proposal

1 How to reconcile risk sharing and market discipline in the euro area
Agnès Bénassy-Quéré, Markus K Brunnermeier, Henrik Enderlein, Emmanuel Farhi, Marcel Fratzscher, Clemens Fuest, Pierre-Olivier Gourinchas, Philippe Martin, Jean Pisani-Ferry, Hélène Rey, Isabel Schnabel, Nicolas Véron, Beatrice Weder di Mauro, and Jeromin Zettelmeyer

The Debate

Section 1: Breaking the doom loop: European deposit insurance and regulation of sovereign exposures

2 Breaking the stalemate on European deposit insurance
Isabel Schnabel and Nicolas Véron

3 Building a stable European Deposit Insurance Scheme
Dirk Schoenmaker

4 Refocusing the debate on risk sharing under a European Deposit Insurance Scheme
Jacopo Carmassi, Johanne Evrard, Laura Parisi, and Michael Wedow

5 Regulating the doom loop
Spyros Alogoskoufis and Sam Langfield

Section 2: How to create euro-area safe assets?

6 The feasibility of sovereign bond-backed securities for the euro area
Philip Lane and Sam Langfield

7 Beyond ESBies: Safety without tranching
Jeromin Zettelmeyer and Álvaro Leandro

8 Delivering a safe asset for the euro area: A proposal for a Purple bond transition
Lorenzo Bini Smaghi and Michala Marcussen

9 Turning national growth-indexed bonds into European assets: A proposal to strengthen the euro area
Julien Acalin

Section 3: Ensuring an adequate provision of liquidity

10 EMU: Liquidity of solvent member states more important than fiscal stabilisation
Vesa Vihriälä

11 The role of the ECB in the reform proposals in CEPR Policy Insight 91
Emmanuel Farhi and Philippe Martin

12 Make euro area sovereign bonds safe again
Grégory Claeys

13 Euro area reform cannot ignore the monetary realm
Jérémie Cohen-Setton and Shahin Vallee

Section 4: The case for better fiscal rules

14 Fiscal rules and the role of the Commission
Thomas Wieser

15 Refocusing the European fiscal framework
Lars Feld, Christoph Schmidt, Isabel Schnabel, and Volker Wieland

16 The economic case for an expenditure rule in Europe
Zsolt Darvas, Philippe Martin, and Xavier Ragot

17 Reforming the EU fiscal framework: A proposal by the European Fiscal Board
Roel Beetsma, Niels Thygesen, Alessandro Cugnasca, Eloïse Orseau, Polyvios Eliofotou, and Stefano Santacroce

Section 5: Do we really need a central fiscal capacity?

18 Whither a fiscal capacity in EMU
Lars Feld

19 A more stable EMU does not require a central fiscal capacity
Michel Heijdra, Tjalle Aarden, Jesper Hanson, and Toep van Dijk

20 A European fiscal capacity can avoid permanent transfers and improve stabilisation
Jan Stráský and Guillaume Claveres

Section 6: Could market discipline do more harm than good?

21 The crux of disagreement on euro area reform
Stefano Micossi

22 Deepening EMU requires a coherent and well-sequenced package
Marco Buti, Gabriele Giudice, and José Leandro

23 Risk sharing and market discipline: Finding the right mix
Guido Tabellini

24 Could the 7+7 reportís proposals destabilise the euro? A response to Guido Tabellini
Jean Pisani-Ferry and Jeromin Zettelmeyer

Section 7: Do we need to think even bigger?

25 Blind spots and unintended consequences of the 14 economists' Policy Insight
Sebastian Dullien

26 Europe needs a broader discussion of its future
Guntram Wolff

27 Euro area reform: No deal is better than a bad deal
Peter Bofinger

28 Beyond risk sharing and risk reduction: A Spanish view of EMU reforms
Rafael Doménech, Miguel Otero Iglesias, and Federico Steinberg

29 Fixing the euro needs to go beyond economics
Anne-Laure Delatte

A Response

30 Euro area reform: An anatomy of the debate
Jean Pisani-Ferry

Epilogue

31 Euro area architecture: What reforms are still needed, and why
Agnès Bénassy-Quéré, Markus K Brunnermeier, Henrik Enderlein, Emmanuel Farhi, Marcel Fratzscher, Clemens Fuest, Pierre-Olivier Gourinchas, Philippe Martin, Jean Pisani-Ferry, Hélène Rey, Isabel Schnabel, Nicolas Véron, Beatrice Weder di Mauro, and Jeromin Zettelmeyer