Since the onset of the euro-crisis, the old debate pertaining to the supra-national stabilisers in the euro-area has gained new relevance. While economic textbooks have long stipulated that countries forming a monetary union need an alternative mechanism for dealing with asymmetric shocks and even the early feasibility studies on Economic and Monetary Union EMU had demanded a supranational transfer scheme (MacDougall 1977), EMU came into existence in the late 1990s without such a scheme.
By now, most observers agree that the euro-crisis was (with the exception of Greece) is not the result of irresponsible fiscal policies, but the consequence of problems in the banking systems which resulted partly from national boom-and-bust-cycles. Hence, for a more sustainable and better-functioning monetary union, a growing body of literature now asks for mechanisms to dampen booms and bolster recessions.
The new debate can best be observed in a number of European Union documents, such as the European Commission’s roadmap detailing propositions for a more complete monetary union; as well as that dubbed the “four presidents‘ report” prepared by the president of the European Council, in conjunction with presidents of the European Commission, the European Central Bank and the Eurogroup. The European Commission’s concept for “Social Dimension of EMU” is also an example of such documents, all of which call for a “fiscal capacity” for the eurozone.