Risk sharing in the euro area

01/10/2018 to 30/09/2021

Risk sharing mechanisms are essential for economic federations. They spread the burden of unforeseeable, adverse economic developments across the states of the federation. As such they may increase efficiency, further acceptance and societal cohesion, or may reflect moral principles of fair burden sharing. But almost inevitably, cross-country risk sharing conjures up concerns about moral hazard and legitimacy. The European integration process involved the formation of risk sharing mechanisms, but of very limited reach, as major risk sharing mechanisms were deliberately kept outside the realm of the treaties. The project investigates current risk-sharing arrangements in the euro area from an interdisplinary perspective: it involves economists as well as legal scholars. In addition there is a collaboration with scholars from Bocconi University in Milan and Aristotle University in Thessaloniki