Policy Instruments for a Crisis-Proof European Union

Although numerous euro area reforms have been carried out in the last decade, fostering economic crisis resilience and convergence among Member States remains high on the agenda. This policy brief draws on results of several studies analysing specific reform proposals and preferences. We cover the proposals for a “European Finance Minister”, a reform support programme, and a European unemployment re-insurance scheme. Moreover, we survey economists of Central and Eastern Europe on their preferences of euro area reform. We find that further euro area reforms should include both elements of fiscal discipline and fiscal solidarity. A European unemployment re-insurance scheme might serve as such a solidarity tool. A reform support programme could successfully incentivise necessary reforms, while a European Finance Minister would not lead to any value added for the euro area.

Dolls, Mathias, Annika Havlik, Friedrich Heinemann and Carla Krolage (2019), Policy Instruments for a Crisis-Proof European Union, Leibniz Research Alliance - Crises in a Globalised World Working Papers.