EU Federalism in Crisis
Lannoο, Karel. In the run-up to this week’s European Council, Karel Lannoo offers his assessment of what has been put on the table so far in response to the euro crisis – and what more needs to be done. He starts with an assessment of the measures taken in the ‘six-pack’ and the debate on […]
Eurobonds are likely to increase the risk of joint defaults in the Eurozone
Wagner, Wolf. As government advisors and central bankers race through the different options to save the euro, this column argues that one such proposal, Eurobonds, will actually increase the risk that several Eurozone countries fail together. It shows using basic arithmetic that these bonds, sometimes labelled ‘stability bonds’, may actually be more likely to harm […]
Το ελληνικό και ευρωπαϊκό αδιέξοδο
Χατζησταύρου, Φιλίππα. Στο σημερινό κλίμα αυξανόμενης πολιτικής και οικονομικής αβεβαιότητας, δύο διαδικασίες λαμβάνουν χώρα ταυτόχρονα στην Ευρώπη. Από τη μία πλευρά, η οικονομική κρίση είναι η εκδήλωση της κρίσης των κρατών που βρίσκονται σε θέση αδυναμίας απέναντι στις ανησυχητικές συνέπειες των διεθνών εμπορικών, οικονομικών και χρηματοοικονομικών συναλλαγών. Από την άλλη πλευρά, οι εθνικές πολιτικές ελίτ απομακρύνονται όλο […]
Winning the European Confidence Game
Rajan, Raghuram. If any solution to the European crisis proposed over the next few days is to restore confidence to the sovereign-bond markets, it will have to be both economically viable and politically palatable to rescuers and rescued alike. This means paying attention not just to the plan’s technical details, but also to appearances. Πηγή: […]
Default a World Away Has a Greek Lesson
Blejer, Mario, Levy-Yeyati, Eduardo. The inevitable is finally happening. Although new uncertainties tend to replace old ones — the focus has shifted to Italy’s troubles in the past few weeks — Greece is going through a default. It’s likely that this process will be guided by the broad outlines of an agreement reached between the […]
What Can Save the Euro?
Stiglitz, Joseph. Just when it seemed that things couldn’t get worse, it appears that they have. Even some of the ostensibly “responsible” members of the eurozone are facing higher interest rates. Economists on both sides of the Atlantic are now discussing not just whether the euro will survive, but how to ensure that its demise […]
The Draghi Deal
Mankiw, Greg. If I understand the news coming out of Europe correctly, the new head of the European Central Bank is offering a simple deal: If fiscal policy becomes hawkish, monetary policy will be dovish. In other words, as government spending is cut to put European governments on a sounder financial footing, monetary policy will do its best to ensure that any adverse […]
Do Eurozone leaders finally ‘get it’? Not quite yet
Wyplosz, Charles. This week’s announcements by German Chancellor Angela Merkel and ECB President Mario Draghi that the Eurozone is taking steps towards a closer fiscal union seem to be calming markets and restoring confidence in the decision-making of Eurozone leaders. This column argues, however, that the devil is still in the detail. Πηγή: Voxeu πλήρες […]
Eurobills, not Eurobonds
Hellwig, Christian, Philippon, Thomas. Fiscal union is now officially on the European agenda, but the issue of Eurobonds remains controversial. This column argues that the Eurozone needs Eurobills, ie debt of maturities less than a year. Issuing Eurobills – up to 10% of Eurozone GDP – would help with crisis management as well as financial […]
Agreement needed on liquidity provision to restore confidence in the eurozone
Micossi, Stefano. The multiple attempts to restore confidence in the eurozone over the 18 months that have passed since the first Greek rescue in May 2010, have clearly failed. Indeed, following each round of emergency measures agreed by the eurozone summits, matters have turned for the worse. This contribution by Stefano Micossi exhorts the leaders […]