A Transfer Mechanism as a Stabilization Tool in the EMU

With the crisis in the euro area, the issue of the institutional structure of the monetary union has gained in significance. One problem with regard to the longer-term stability of the euro area is the absence of mechanisms to adequately absorb asymmetric cyclical shocks in the individual member states. Such an instrument is essential in order to be able to implement a single monetary policy suitable for all countries. Consequently, the European Monetary Union should be equipped with an economic transfer mechanism - for instance, in the form of common unemployment insurance. This is not an instrument to solve the current crisis but rather to provide more stability to the European Monetary Union in the medium and long term.