"The background to this report is the growing variation between EU Member States' economic and social situation, which has been reinforced by the economic recession and subsequent fiscal consolidation measures. It is increasingly recognized that economic and social responses to the crisis will require strengthened solidarity between Member States, in the first place within the Eurozone but also beyond. While most decisions about taxes and spending remain at national level within the EU, it can equally be argued that continued successful European integration needs an elaborate risk-sharing system where various forms of automatic fiscal transfer mechanisms may have a key role, particularly in Eurozone countries. One strategy is to set up EU- or Eurozone wide unemployment provisions where resources are transferred to areas particularly hit by asymmetric shocks."

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