Potential of independent fiscal boards and early warning systems for crisis prevention

The European economic and financial crisis has revealed serious deficiencies and risks for the proper functioning of the monetary union. While some progress has been achieved in strengthening policy instruments, the euro area institutions still show huge deficits. Against this background, the project will deal with institutional reforms for a more resilience euro area. In particular, the potential and the detailed construction of independent economic policy advisory boards for euro countries will be explored. A de-politicization through more independent advice and decision making could be an option to achieve a better and more sustainable economic policy in times of acute crises and when impalances start to arise. However, new independent advisory boards would also need better tools to identify imbalances prior to crises. Consequently, an early warning system is proposed for the timely detection of crises and its signals through the emergence of imbalances well in advance. These features should also pose an integral part of an insolvency procedure for sovereigns.

While the project has an economic focus, a comprehensive treatment requires the support of other disciplines, especially in the law and political area. For that purpose, the project partners involve researchers from other institutions and further networks.

Participating Institutes

German Institute for Economic Research (DIW)

centre for European Economic Research (ZEW)


Dreger, Christian; Kholodilin, Konstantin A. (2018): Early Warning System of Government Debt Crisis. Discussion Papers 1724.
Access publiCation


Workshop of the Leibniz Research Alliance Crisis in a Globalised World
(10. April 2017)

Contact Persons

Prof. Dr. Christian Dreger (ehem. DIW)

Prof. Dr. Friedrich Heinemann (ZEW)

Project term

09/2016 - 09/2017