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Exchange of views: Fundamental conditions for fiscal union

Day 2 Afternoon

Thursday 04 April

Room :

Constanta Room - Exchange of views

Speakers

Chair
Harald Waiglein - Director General for Economic Policy and Financial Markets, Federal Ministry of Finance, Austria and Member of the Board of Directors, ESM & EFC
Discussants
Alessandro Rivera - Director General of the Treasury, Ministry of Economy and Finance, Italy
Tuomas Saarenheimo - Permanent Under-Secretary, Responsible for International and Financial Affairs, Ministry of Finance, Finland

Objectives of the session

Since 2012 increasing attention has been dedicated at the highest institutional level to reflect on a fiscal capacity for the euro area. There seems to be growing awareness among EU institutions and Member States on the need for such an instrument although divergences remain on the functions, forms and funding of this new dedicated euro area budget.

The main objective of this exchange of views is to discuss whether the time has come to work towards greater integration of the Eurozone economic policies and more specifically to consider putting in place a fiscal union.

The current weaknesses of the EMU and the benefits of deeper fiscal integration will be the first topic of discussion. The second topic will be the possible content and ambition of a fiscal union (i.e. a more significant common budget, an insurance scheme against strong cyclical fluctuations, a common unemployment insurance scheme, an equalisation of interest burden via a European debt agency), the feasibility of implementing such a Union in the current Eurozone context where public debt vulnerabilities remain very high (around or even above of 100% of GDP) in a set of large European economies.

The speakers will be invited to describe the key success factors of any reform of the fiscal architecture of the Eurozone and the short-term steps for progressing towards a deeper fiscal integration.

Points of discussion

What benefits can be expected from a fiscal union? Would greater fiscal integration boost EU economic growth and make a future crisis less severe?

Has the time come to work towards a greater integration of the Eurozone fiscal policies? What are the key success factors for any reform of the fiscal architecture of the Eurozone? What are the priorities right now?