Exact(12)
Skeptics predicted either doom or an unacceptable surrender of sovereignty to a central fiscal authority.
Including non-debt capital receipts of Rs432bn, this should leave a central fiscal deficit of Rs1.51trn, equivalent to 3.3% of GDP, according to the government's projections.
One reason is that European leaders still have not repaired what many economists say is the euro's chief flaw: the absence of a central fiscal authority.
The economic woes of southern "Club Med" countries have illustrated the untenable tensions of linking nations of vast economic disparities in a currency zone without a central fiscal authority or unified budget to address imbalances.
According to the theory of optimal currency areas, a central fiscal policy is necessary because a single interest rate will not suit conditions in all parts of a currency zone.
Before everyone throws money into one big pot, in other words, Berlin wants commitments to deeper integration, which means individual states giving up sovereignty to a central fiscal authority.
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