The December 2018 Euro summit mandated the Eurogroup to develop ‘a budgetary instrument’ for the euro area, with features to be agreed in June 2019. This seminar examines design issues for an effective budgetary instrument, taking into account the need for an adequate fiscal stabilization capacity to complement banking and capital markets union, the Aachen Franco-German proposals for closer defence cooperation, and ongoing preparations for the 2021-27 EU budget. These considerations have implications for the appropriate size of an effective fiscal pillar, the coherence of stabilization goals with envisaged expenditure assignments, and the ‘right’ institutional arrangements for administering a euro area budget.

Adrienne Cheasty comes from the IMF, where she was most recently Deputy Director of the Fiscal Affairs Department, responsible for Europe and for fiscal federal issues. She was previously Deputy Director of the IMF’s Western Hemisphere Department, responsible for Mexico, Venezuela, Andean countries, and the Caribbean. Earlier, she worked on numerous IMF-supported crisis programmes in emerging markets and fragile states. Research areas include euro area fiscal-financial architecture, financial crisis management, debt issues, measurement of the fiscal deficit, and financial aspects of climate change. She was a member of the World Economic Forum’s Global Agenda Councils on Fiscal Sustainability and on Public Finance and Social Protection, and has taught at Harvard, Yale and Johns Hopkins.