What kind of fiscal union?

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Series Details No. 6, November 2011
Publication Date November 2011
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The euro area's shortcomings have become abundantly clear. It was set up without powers of strict surveillance over macroeconomic imbalances, crisis management and resolution instruments, or adequate banking supervision and resolution tools. The core reason for these failures is the absence of a fiscal union with corresponding authority over fiscal, structural and banking policies. Attempts to right these wrongs have been ad hoc and have so far fallen short and moral hazard is prevalent. Financial markets are increasingly aware of these inadequacies, and have started to price in the possibility of the break up of the euro area.

Source Link http://aei.pitt.edu/33003/1/What_kind_of_fiscal_union__(English).pdf
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