The euro area will not have a centralised budget and smoothing of country-specific asymmetric shocks via private financial markets will develop only slowly. Mistrust among the governments has caused rigid, even pro-cyclical fiscal policies. Smoothing mechanisms are absent due to the fear that...

Preparations are underway to revise national accounting to implement actuarial recording of pension liabilities for corporations and government as an employer. This paper extends this to unfunded public pensions with the help of "implicit tax" in pension contributions. The clearest advantages of...