Were, for instance, an asymmetric shock to create unemployment in one region, adjustment could take place through labour moving to another region and/or a change in wages. Furthermore, cooperation over time increases integration between countries. Although the business cycles in countries contemplating forming a union are perhaps not perfectly correlated at the outset, they will likely become more so over time as a result of increased economic integration; the so-called endogeneity hypothesis of the optimum currency area criteria. 3 In turn, this will mean increased efficiency of the common monetary policy. In general, better functioning markets imply greater economic efficiency. In this specific case, the better the markets for capital and labour function, the greater the scope for handling asymmetric shocks. However, simply waiting for optimality might be likened to waiting for Godot; i.e. in vain. Thus, a possible aspect of the issue of optimality is that focusing solely on the illusive goal will obscure the rewards coming from trying to get there. Or as the Swedish poet Karin Boye has put it, “Yes, there is goal and meaning in our path - but it's the way that is the labour's worth.” 4 So, from an economic point of view it boils down to two important questions. First, is the country willing to pay an insurance premium consisting of a slightly less efficient economy, to retain the possibility of pursuing an autonomous stabilisation policy if an asymmetric shock were to hit the country?

When compared to monetary policy, fiscal policy has a wide array of possible instruments on both the expenditure and revenue side of the government budget. A possible approach is to consider what characteristics the instrument should have. Preferably, the effect should be general and the measure should be used symmetrically and temporarily. Furthermore, stabilisation policy should, as far as possible, be distinguished from distribution and allocation policy. Proposals of such instrument could include personal income taxes, value-added tax and payroll taxes. This observation leads me to who should do the stabilising. Although the arguments behind the delegation of monetary policy to independent central banks should presumably also apply to stabilisation policy in a fiscal policy regime, such an idea is currently quite far from being conventional wisdom. However, I argue that many of the decision-making problems that have been the basis for much of the academic criticism of fiscal policy stabilisation could be minimised if an independent authority using an appropriate instrument were to make the stabilisation policy decisions. In the short-term, a politically more plausible alternative is to establish an independent body with the responsibility of enhancing transparency by conducting independent forecasts of the country’s deficits and providing recommendations on a regular basis. This is a part of improved governance, as discussed earlier. An institution building its authority on impartiality and expertise might well contribute to putting some much needed pressure on governments with lax fiscal policies. Here, transparency is a vehicle for accountability and political pressure.