Giancarlo Corsetti

Giancarlo Corsetti is Professor of Economics at the University of Rome III and a consultant to the research department of the Bank of Italy. He has previously taught at Yale University and the University of Bologna. He is a member of the European Economic Advisory Group (EEAG) at the CESifo Institute in Munich.

Papers Published in World Economics:

How to Reform Europe’s Fiscal Policy Framework

The current budgetary problems of some EU member states have intensified the debate on Europe’s fiscal policy framework. It is not enough to change the interpretation of the Stability and Growth Pact. More fundamental revisions of the EU Treaty are needed in order to strike a reasonable balance between longrun sustainability and short-run flexibility. The ceiling on budget deficits should be conditioned on the government debt level, such that the scope for stabilisation policy in downswings is increased in low-debt countries. In addition, the enforcement of the rules should be depoliticised: decisions on sanctions against states violating the rules should be transferred from the political level of the Council of Ministers to the judicial level of the European Court of Justice.

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