A fiscal instrument for the euro area: No escape from politics

The coming months will be a critical juncture for euro area reform. In this paper, Lucas Guttenberg and Johannes Hemkers argue that fiscal instruments conceived exclusively for the purpose of economic stabilization will have difficulty passing these tests. Instead, marrying the need for stabilization with the benefits of European public goods provision could be a promising avenue.

Dr. Johannes Hemker is Policy Advisor for the Berlin State Government, he formally worked for the World Bank Group.

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