While such coordination during the crisis was not questioned except by extreme purists, now in the recovery period, several fundamental concerns are resurfacing. At the heart of these concerns is whether monetary policy is once again becoming hostage to fiscal compulsions. The specifics of the debate vary but the basic issues are similar.
In the US, the debate is over the trade-off between short-term fiscal stimulus and long-term fiscal consolidation. In the euro area, the question is about the shared benefits of a monetary union without the shared responsibilities of a fiscal union.