The FrancoGerman proposals did not mention any mechanisms to this effect. Similarly, reliance on an unemployment trigger – as foreseen by the Commission – would not enable policymakers to distinguish between “bad luck” and “bad policies”. Indeed, it might potentially reward policy-induced increases in unemployment.
These examples illustrate that any introduction of a central fiscal capacity should be coupled with an overhaul of the economic and fiscal governance framework. Moreover, agreement would be more likely to be reached if proposals did not repackage tax proposals of questionable value which have been rejected in the past.