Economists at the European Stability Mechanism (ESM), the euro area’s permanent rescue fund, believe that the ESM is best placed to set up a fiscal capacity for the euro area that would provide loans to one or more States facing an asymmetric macroeconomic shock.
With a budget of €250 billion, the fund would provide loans with a maturity of 10 years, which for the first 3 years would not be subject to interest or fee repayment so as not to hamper recovery in the recipient country. For...