A Fiscal Union for the Euro: Some Lessons from History
The recent financial crisis 2007-2009 was the longest and the deepest recession since the Great Depression of 1930. The crisis that originated in subprime mortgage markets was spread and amplified through globalised financial markets and resulted in severe debt crises in several European countries in 2010 and 2011. Events revealed that the European Union had insufficient means to halt the spiral of European debt crisis. In particular, no pan-European fiscal mechanism to face a global crisis is available at present. The aim of this study is to identify the characteristics of a robust common fiscal policy framework that could have alleviated the consequences of the recent crisis. This is done by using the political and fiscal history of five federal states; Argentina, Brazil, Canada, Germany and the United States.
We have received constructive comments from many. We would like to thank in particular Iain Begg, Michael Bergman, Daniel Heymann, Sven Langedijk, Paul van den Noord, Jakob von Weizsäcker and Guntram Wolff. Michael Bordo started this paper in 2006 when he was a visiting scholar at DGECFIN in Brussels. The original research was funded by DGECFIN from a grant to him in 2006-2007. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Michael D. Bordo & Lars Jonung & Agnieszka Markiewicz, 2013. "A Fiscal Union for the Euro: Some Lessons from History ," CESifo Economic Studies, CESifo, vol. 59(3), pages 449-488, September. citation courtesy of