The benefits of the proposed new framework are clear, especially for the high debt economies of Europe where, in the current economic environment, where financial market fragmentation remains a substantial risk.
These three pillars together offer a transparent, robust, and credible framework that has the potential to minimize debt externalities, enhance the countercyclicality of fiscal policy, and contribute towards minimizing financial fragmentation without overburdening monetary policy and without turning the eurozone into a transfer union as some members fear.