On the future of EMU: Targeted reforms instead of more fiscal integration

Jürgen Matthes and Anna Iara

No 17/2016, IW-Reports from Institut der deutschen Wirtschaft (IW) / German Economic Institute

Abstract: According to a dominant narrative, the recent crisis has allegedly shown that EMU is not sustainable without fiscal risk sharing. We identify two major hazards associated with this view. First, trust in EMU governance could unduly erode despite major recent achievements, notably if further fiscal integration should prove elusive. Second, the debate on further fiscal integration could distract from additional reforms needed to prevent financial cycles in the future. In contrast, we suggest that a limited set of reforms (mostly focusing on the financial sector) would suffice to make EMU sustainable.

JEL-codes: E02 F45 G28 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-eec and nep-mac
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:iwkrep:172016

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