Policy Brief: Accountability Bonds – Reconciling Fiscal Policy Based on Market Discipline with Financial Stability

Accountability bonds revive market discipline in the Eurozone without endangering fiscal and financial stability - and they address the various concerns from difference sides. Clemens Fuest (ifo Institute) and Friedrich Heinemann (ZEW) have proposed the new type of bonds for overcoming the debt crisis in the Eurozone two years ago. In our new EconPol Policy Brief, the two EconPol network members revisit their concept of accountability bonds in the light of current developments, respond to criticism and explain why they are an innovative instrument that stand a real chance of building a consensus, now more than ever.