Publication

Dramatic negotiations with Greece in the first half of 2015 have served as a reminder of the weaknesses of the eurozone. This paper contributes to the debate about what would make the eurozone more crisis-resistant and stable in the long-run by looking at whether creating a fiscal union could be the answer. The authors argue that creating a fiscal union is an important and effective element of stabilizing the eurozone but that it is no magic bullet and will need sovereignty sharing and risk sharing mechanisms to help it succeed.