And even if there were a responsibility at the European level for BIS Review 45/1998  -7-  doing so, the possibility could not be ruled out that, ultimately, the result would be more rigidity, rather than more flexibility. At the same time, there is no regional revenue equalisation scheme, comparable to the systems operated in a national state.
A social and transfer union cannot and must not make up for any lack of flexibility and competitiveness, for the upshot would probably be not only less flexibility, but possibly also more political disagreement. At the same time, however, the euro needs discipline on the part of national fiscal policy, at least as far as fiscal deficits are concerned.