2013年-CEPS欧洲政策研究中心_Proposal_for_a_Stabilisation_Fund_for_the_EMU_15页_275kb

Summary of "Proposal for a Stabilisation Fund for the EMU" by Bernard Delbecque

Core Content

This paper proposes the creation of a European Monetary Union (EMU) Stabilisation Fund (ESF) as a mechanism to absorb economic shocks and reduce output volatility among EMU member countries. The idea is to complement the existing monetary union with a fiscal shock-absorption system that functions as an insurance mechanism, without requiring a central fiscal authority or permanent transfers between countries.

The ESF is designed to be rules-based, with net contributions determined by the difference between actual and long-term GDP growth rates. The formula for net contribution is:

$$ d = \alpha (y^e - y^*) $$

Where:

• $ d $ is the net contribution as a percentage of GDP
• $ y^e $ is the actual GDP growth rate
• $ y^* $ is the long-term GDP growth rate
• $ \alpha $ is a coefficient that determines the sensitivity of contributions to the difference in growth rates

The ESF would accumulate reserves during booms and issue bonds or make disbursements during downturns, thus helping to stabilise aggregate demand and reduce unemployment. It is argued that such a mechanism could be implemented without significant political integration, thereby avoiding the need for a central budget or transfer of sovereignty.

Main Viewpoints

• The current EMU lacks a central fiscal capacity, which limits the ability of member states to respond to economic shocks, especially during recessions.
• Risk-sharing mechanisms are necessary to improve the resilience of the EMU and reduce output volatility.
• The ESF is a complementary mechanism to existing fiscal convergence efforts, designed to address short-term cyclical fluctuations rather than long-term structural imbalances.
• The ESF would not lead to permanent transfers, but rather temporary support based on the country's economic position.
• The mechanism is designed to be automatic, reducing the need for political discretion and ensuring transparency.

Key Information

Functionality of the ESF

• Disbursements occur when a country's GDP growth is below its long-term trend.
• Contributions are made when GDP growth is above the trend.
• The net contributions are calculated annually based on the difference between actual and long-term GDP growth.
• The ESF can borrow from financial markets when needed, ensuring it remains self-sustaining and not dependent on permanent funding.

Institutional Arrangements

• The European Stability Mechanism (ESM) could manage the investment and debt management of the ESF.
• The European Commission could be responsible for assessing the economic cycle position of member states and calculating net contributions.
• The ESF is not a federal budget, but rather a fiscal stabilisation tool that operates within the existing EMU framework.

Macroeconomic Impact

• The ESF would smooth economic growth by reducing the impact of positive and negative shocks.
• It would reduce the need for austerity during downturns and limit fiscal stimulus during booms.
• The illustrative scenario shows that the ESF could have accumulated significant reserves (€230 billion) by 2008 and made disbursements of €431 billion from 2009 to 2013.

Implementation Challenges

• Accurate estimation of long-term GDP growth is essential for the proper functioning of the ESF.
• The European Council and other institutions would need to agree on a transparent and consistent method for calculating GDP growth and net contributions.
• Forecast errors and historical revisions of GDP growth data could affect the accuracy of contributions, necessitating a flexible adjustment mechanism.

Criticisms and Counterarguments

• A potential moral hazard could arise if the ESF reduces the incentive for sound fiscal policy.
• However, the ESF is not designed to promote long-term convergence, but rather to smooth short-term fluctuations.
• The contributions are temporary, and the ESF is not a substitute for the Stability and Growth Pact (SGP), which remains in place to ensure fiscal discipline.

Conclusion

The paper concludes that the ESF is a viable and necessary complement to the EMU, especially in light of the current economic crisis. It argues that a modest fiscal union with rules-based risk-sharing could enhance economic resilience without requiring deep political integration. The implementation of the ESF would depend on political agreement on the calculation method, institutional responsibilities, and transparent rules to ensure automatic and fair operation.

Key Figures

• The ESF could have accumulated €230 billion by 2008.
• Disbursements of €431 billion occurred between 2009 and 2013, representing 4.7% of euro area GDP.
• The total net contributions to the ESF by 2013 amounted to €201 billion, or 2.1% of euro area GDP.

References to Supporting Studies

• Bordo et al. (2011): Highlight the importance of fiscal capacity in stabilising economic shocks.
• Wolff (2012): Proposes various forms of stabilisation, including unemployment insurance and output gap-based transfers.
• Furceri & Zdzielicka (2013): Suggest a GNP-based stabilisation mechanism, which the ESF is inspired by.
• Dreze & Durre (2013): Propose a GDP-linked bond mechanism, which the ESF avoids by using a business cycle-based approach.

Annexes

• Annex 1: Shows the average potential real GDP growth for the euro area from 1999 to 2013.
• Annex 2: Provides net contributions to the ESF for each euro-area country from 1999 to 2013.
• Annex 3: Illustrates the growth smoothing effect of the ESF for eight member countries.
• Annex 4: Demonstrates the impact of output gap data on the calculation of net contributions.