Summary of Which Fiscal Union for the Euro Area?

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Which Fiscal Union for the Euro Area? summary


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The euro zone, once so promising, has become a drag on economic growth. Economists Agnès Bénassy-Quéré, Xavier Ragot and Guntram B. Wolff blame the disconnect between centralized monetary policy and uncoordinated national fiscal policies. They suggest several valid ideas, such as a federal backstop for the banking system and regional unemployment insurance that would take effect only during crises. Their advice focuses on harmonizing policies across the euro zone’s 19 member states, which tend to act in their own narrow interests. getAbstract recommends this instructive, scholarly report to policy makers and investors interested in solutions to Europe’s malaise.

In this summary, you will learn

  • Why a disconnect between the euro area’s monetary and fiscal policies has become a drag on economic growth, and
  • How the euro zone could better align fiscal priorities.

About the Authors

Agnès Bénassy-Quéré is a professor at the Paris School of Economics. Xavier Ragot is president of the French Economic Observatory. Guntram B. Wolff is the director of Bruegel.



A common currency and discordant fiscal policies mark the euro zone. The members share a monetary policy, but each nation makes its own fiscal decisions. European leaders have no way to impose a joint fiscal strategy across 19 national budgets. In the euro area, the only equivalent of a federal budget...

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