Raphael Corbi, Elias Papaioannou, Paolo Surico, 01 May 2019

The recent political crisis in the euro area has brought the design of fiscal policy to the forefront of public debate, with many arguing that EU-level transfers are necessary for the ‘completion’ of EMU. This column uses extensive data from a Brazilian federal transfer scheme to show that transfers can play a valuable stabilisation role in a currency union.

Christopher Pissarides, 12 February 2016

There are certain conditions needed to make a common currency across diverse economies a success and the Eurozone is clearly not satisfying them. This column argues that institutions and policies in place six years after the debt crisis have mitigated the risks of another Great Recession. But they have not done enough to alleviate the need for fiscal transfers in the future. We need ever-closer fiscal cooperation, with some caveats.

Paul De Grauwe, Yuemei Ji, 15 January 2015

The ECB has been struggling to implement a programme of quantitative easing (QE) that would successfully target deflation. The main difficulty is political, stemming from opposition from German institutions. Their argument against is that a government bond buying programme by the ECB would mix fiscal and monetary policy. This column argues the opposite – such a programme can be structured so that it does not mix fiscal and monetary policy. It, therefore, would not impose a risk on German taxpayers.

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