Euro Area Reform

Debate Moderator(s):  Jean Pisani-Ferry, Jeromin Zettelmeyer


Policy Insight 91: Reconciling risk sharing with market discipline: A constructive approach to euro area reform


Related Content:

Some reactions to the report, and independent contributions that have already been published by leading economists:

A Franco-German consensus on the euro?
By Martin Sandbu, 17 January 2018 in the Financial Times
Sandbu writes: “a group of 14 French and German economists, many of the best policy-oriented thinkers of both countries … have come together to create a consensus road map on eurozone reforms … Decision makers in all eurozone countries should place this contribution prominently on their policy drawing boards.” Read the full article here: (https://www.ft.com/content/51e75114-fb63-11e7-9b32-d7d59aace167)

Find information on how to add a comentary to this debate here

Please register or log in to post a commentary to this debate

Lead Commentaries

Marco Buti, Gabriele Giudice, José Leandro , 25 April 2018

The debate on deepening EMU is entering a critical stage. This column, contributing to VoxEU's Euro Area Reform debate argues that while the proposals in a recent CEPR Policy Insight are both timely and attractive, the mix seems unbalanced and carries significant risks. The focus of the proposals on reducing fiscal risks could lead to financial distress, ultimately requiring more, not fewer, rescues.

Andrew Watt , 23 April 2018

There is currently both an economic and a political window of opportunity for reform in the euro area. This column, which forms part of VoxEU's Euro Area Reform debate, discusses the strengths and weaknesses of the proposals in the recent CEPR Policy Insight and makes recommendations for extensions and alternatives.

Emmanuel Farhi, Philippe Martin , 19 April 2018

One criticism of the recent CEPR Policy Insight on euro area reform is its supposed silence on the role of the ECB. In this column,  which we add to VoxEU's Euro Area Reform debate, two of the authors of the Policy Insight argue that the reforms proposed in it actually have significant implications for the ECB’s role, in a way that would make it easier for the ECB to fulfill its mandate.

Dirk Schoenmaker , 17 April 2018

Deposit insurance, like any insurance scheme, raises moral hazard concerns. Such concerns arising from European deposit insurance can be alleviated through a country-specific component in the risk-based premium for deposit insurance and limits on sovereign bond exposures on bank balance sheets. This column, which forms part of VoxEU's Euro Area Reform debate, argues, however, that proposals to maintain national compartments in a new European Deposit Insurance Scheme are self-defeating, as such compartments can be destabilising in times of crisis.

Vesa Vihriälä , 13 April 2018

The smooth functioning of the EMU requires risk sharing. This column, which joins VoxEU's Euro Area Reform debate, argues, however, that its best use is not in the support of fiscal expansion in recession countries, but in ensuring the liquidity of solvent sovereigns under market pressure. Giving the ESM/EMF access to central bank financing should be explored as a means to facilitate it.

Sebastian Dullien , 11 April 2018

The recently published CEPR Policy Insight by a team of French and German economists proposes a package of reforms to make progress on risk sharing and risk reduction in the euro area. This column, which forms part of VoxEU's Euro Area Reform debate, argues that while many of the package’s elements make sense, it leaves too many questions open and fails to address a number of central problems of EMU architecture.

Lorenzo Bini Smaghi , 09 April 2018

A team of French and German economists recently proposed on this site a series of reforms to strengthen the euro area's institutional framework. This column, which joins VoxEU's Euro Area Reform debate, argues that while the proposals  form a useful basis for discussion, they are nevertheless subject to important shortcomings.

Isabel Schnabel, Nicolas Véron , 07 April 2018

Many EU-level reports have highlighted a European Deposit Insurance Scheme as a necessary component of banking union, but none of these options has met sufficient consensus among euro area countries. The authors of this column, which joins VoxEU's Euro Area Reform debate, propose to end the deadlock with a design that is institutionally integrated but financed in a way that is differentiated across countries.

Stefano Micossi , 05 April 2018

A recent report by a group of French and German economists proposed a set of reforms to improve euro area’s financial stability, political cohesion, and potential for delivering prosperity to its citizens. This column, which joins VoxEU's Euro Area Reform debate, discusses some specific aspects of the proposals that in the author’s view deserve further clarification, and considers the overall implications of the proposals for financial stability of 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, Jeromin Zettelmeyer , 17 January 2018

The euro area continues to suffer from critical weaknesses that are the result of a poorly designed fiscal and financial architecture, but its members are divided on how to address the problems. This column proposes six reforms which, if delivered as a package, would improve the euro area’s financial stability, political cohesion, and potential for delivering prosperity to its citizens, all while addressing the priorities and concerns of participating countries.