By Jasper De Meyer (Intern at ECIPE)
The Eurozone crisis muddles forth. Growth will be stagnant or even decline in 2012. Employment prospects remain bleak as unemployment rose by 2.6 million in the last year alone. In September, the ECB announced its Outright Monetary Transactions programme in an attempt to ease sovereign debt pressures and in December EU leaders tentatively moved towards an EU-wide banking union. But what role, if any, could Northern fiscal policy play to reduce EU-wide macroeconomic imbalances? A recent report by the EU Commission sheds light on this issue.