Europe’s Quest for Fiscal Discipline

Charles Wyplosz

No 498, European Economy - Economic Papers 2008 - 2015 from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: This paper argues that the sovereign debt crisis is the result of a lack of fiscal discipline broadly defined to include adequate banking supervision. The paper argues that Europe has inadvertently adopted the wrong model of collective discipline, because it is centralized while a decentralized model not only better fits the Euro Area makeup but also has a superior track record. It also notes the need for the ECB to accept its role of lender of last resort, which in turn requires the adoption of a full-blown banking union.

JEL-codes: E58 E61 G28 H53 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2013-04
New Economics Papers: this item is included in nep-eec, nep-mac and nep-pke
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:euf:ecopap:0498

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