...here it comes. The academic and propaganda machines for INCREASED euro-area powers and fiscal "cooperation" (read: entanglement) are in full rapid-fire print mode.
To wit, from this paper:
The stronger the statutory base establishing national fiscal rules (that may vary between mere party coalition agreements and constitutional law), the lower risk premia will be. But also the enforcement mechanisms of the rules turn out to be important while the body in charge of the supervision of compliance with the fiscal rule appears to be somewhat less important. Our results thus show that rules become the more credible to market participants the stronger their binding character is, and the more
effectively they can be enforced. Moreover, the results point to significant benefits in terms of interest rate cost on public debt.