Co-authors Massimo Morelli, Jaime Luque, and José Tavares recently published "Fiscal Union Consensus Design under the Risk of Autarky," a Centre for Economic Policy Research Discussion Paper. The model developed in the paper provides the basis for the authors' comment in Eurointelligence that it doesn't take "extraordinary events" to bring eurozone countries to accept more fiscal coordination in a monetary union.
In the Eurointelligence comment, Morelli et al. argue, "Even before the financial crisis, the volatility of economic fundamentals started to rise, caused by real economic shocks and partially by globalization. The eurozone was already diverging well before 2008. We thus argue that real, financial, and debt related fiscal policy integration is necessary and sufficient to save the Euro."
In the CEPR Discussion Paper, the authors model wide-ranging institutional reforms that would reallocate political weights used to decide the common tax rate and find that redistributing decision power among the European Union countries could promote support among all the member countries for a fiscal dimension to the monetary union.