Economia Politica

, Volume 34, Issue 1, pp 11–30 | Cite as

A policymaker’s guide to a Euro area stabilization fund

  • Etienne FarvaqueEmail author
  • Florence HuartEmail author


In 2012, several reports were published advocating the creation of a genuine fiscal capacity at the European level, to strengthen the foundations of the Economic and Monetary Union (EMU) by helping member countries to adjust to asymmetric shocks. The design of a common stabilization fund should be well thought, though: what would be stabilized? When would transfers be paid? Would they be directed towards governments or individuals? How would they be financed? And would they help stabilize economies? We address these questions by outlining recent existing proposals, their features and their simulated stabilization effects. We finally underline the difficulties in implementing such a scheme.


Federal transfers Fiscal union Fiscal federalism European integration Stabilization effects 

JEL classification

F45 H87 E60 



We thank the editor and the referees of the journal for useful suggestions and remarks. The usual disclaimer applies.


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Copyright information

© Springer International Publishing Switzerland 2016

Authors and Affiliations

  1. 1.LEM-CNRS (UMR 9221)Université de LilleVilleneuve d’Ascq CedexFrance
  2. 2.Skema Business SchoolLilleFrance
  3. 3.CIRANOMontréalCanada

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