Eugen Koevisis Chief Economist at Akava – The Confederation of Unions for Professional and Managerial Staff in Finland.
To keep the EMU functioning we do not need a fiscal union with budgetary and redistributive powers. What we need is common bank resolution mechanism including some form of shared responsibility to rule out the very possibility of European banking system collapse.
The crisis has forced member states to agree on major changes amounting to much tighter fiscal policy co-ordination and surveillance which are very much in the spirit of the original Stability and Growth Pact, which emphasizes the responsibility of each member state in conducting sound budgetary and macroeconomic policies. The measures undertaken so far aim at tackling the problems in the real economy underlying the current crisis. While the agreed tools are appropriate for crisis prevention, they are not sufficient for financial crisis management.