Focus on the long-run sustainability of EMU – in particular the sustainability of sovereign debt, and of union-wide burden-sharing mechanisms.

Specific Objectives:

1. To clarify the determinants of sovereign debt crises, to develop new indicators that could be used to assess the risk of such crises occurring, and to devise new strategies for reducing this risk.
2. To devise credible rules and strategies for sustainable public debt management appropriate to the institutional and demographic characteristics of the EU/euro area.
3. To provide detailed institutional proposals for optimal fiscal risk-sharing among EMU member states, subject to the constraint that participation cannot be enforced, and to contrast these proposals with the existing institutional framework (e.g. the ESM).