Academic research suggests that in the U.S., private risk-sharing smoothes out a larger percentage of shocks (around 62%) than does public risk sharing via the federal budget (around 13%), findings that are more or less confirmed for Germany as well. DOES THE ANSWER LIE IN MORE INTEGRATION? 6/15  The key question of course is how EMU should be strengthened further.
With respect to the annual budget deficit ceiling, the old saying was, “3% is 3%.” In the meantime, however, there are now federal states that have been flouting the deficit rule for seven years – and have been able to call upon the exceptional circumstances approved by the European Commission.