The paper shows that the introduction a Eurobond together with fiscal capacity at the centre would produce macro-stabilisation benefits both for the ‘core' and ‘periphery' of the Eurozone and would also achieve a rebalancing of the policy mix away from monetary towards fiscal stimulus. To...

This paper deals with alternative approaches for deriving adequate budgetary safety margins. We highlight some critical features of the existing EU Commission's methodology and propose an alternative method for assessing the minimal benchmark, i.e. the value of the deficit-to-GDP ratio that...