Luigi Guiso and Helios Herrera call for true fiscal union for Europe

The EU is trying to bring the euro crisis under control with a debt brake and sanctions for deficit sinners. But a true fiscal union must be built on much firmer ground, write economists Helios Herrera and Luigi Guiso in the business paper Il Sole 24 Ore: "The European monetary union lacks a mechanism to balance out trade deficits and trade surpluses. Without this balancing mechanism, or in other words without a true fiscal union, the monetary union will lose stability in the long term. And without intervention the monetary union will collapse in the foreseeable future. To prevent this the member states must unite to form a fiscal union in which the resources of the countries with trade surpluses are redistributed to those with trade deficits, from Germany to Greece. The global recession and the debt crisis have only aggravated and - earlier than expected - highlighted the problem of lacking fiscal union that had been latent ever since the creation of the euro."

» more information (external link, Italian)
More from the press review on the subject » EU Policy, » Fiscal Policy, » Europe
All available articles from » Luigi Guiso, » Helios Herrera
Who's saying what » Ways out of the debt crisis

» To the complete press review of Thursday, February 23, 2012