It would also reduce incentives to address those national issues if a mutualised insurance scheme were in place. So as you can see, the reasons for postponing EDIS are founded not on an ideology-based rejection, but very much on stability considerations. 4 The road to stability: are we locked in a stalemate?
It also allows monetary policy to account for inflation differentials across individual euro area countries. In the presence of large and persistent dispersion in inflation rates across countries, an inflation objective too close to zero would imply that countries with below average inflation have to systematically operate under deflation – even if average inflation rates for the euro area were in positive territory.