Less economic integration would make it difficult for the ECB to stabilise the euro area economies. Symmetric monetary policy cannot do anything about this and individual countries would need to use fiscal policy tools.
Publisher: London School of Economics and Political Science
Countries: United Kingdom, Switzerland
Well-designed eurobonds would lower financing costs for many euro area countries while hardly or not increasing the costs for the others. These bonds should have an explicit guarantee from the ECB. The bonds could be used up to a limit of GDP (a low number of 10-25% of ...