Proposal for a Stabilisation Fund for the EMU
Delbecque, Bernard. This paper argues that it should be possible to complement Europe’s Economic and Monetary Union with an insurance-type shock absorption mechanism to increase the resilience of member countries to economic shocks and reduce output volatility. Such a mechanism would neither require the establishment of a central authority, nor would it lead to permanent […]
The Sovereign Debt Crisis: Placing a curb on growth (updated edition)
Brender, Anton,Pisani, Florence & Gagna, Emile. This book provides an update to the major 2012 study by the same authors on the dual role of the public sector as the provider of the ultimate riskless asset and, at the same time, the source of a potential major systemic risk. In this second edition, Brender and his […]
Messing up the next Greek debt relief could endanger the Eurozone
Wyplosz, Charles. Greece is in dire straits; it will need more debt relief. This column argues that Greece is suffering because northern EZ countries kicked the can down the road by forcing crisis countries to borrow rather than restructure their debts early on. It is time for the ‘generous’ lenders to face the consequences of their […]
A New Greek Test for Europe
Mody, Ashoka. Over the last year, it has been easy to lose sight of the Greek debt crisis. Brimming with official funds, Greece was apparently on the mend. Though privatization plans lagged, the Greeks won high marks for doubling down on fiscal austerity. In Europe’s summer of quiet triumphalism, ever-lower expectations were easy to beat. […]
How to make Europe’s incipient recovery durable: End policy uncertainty
Buti, Marco, Padoan, Pier Carlo. The Eurozone is recovering but the revival is fragile – ringed by downside risks. This column argues that three steps – reducing policy uncertainty, repairing the financial system, and creating new investment opportunities – are essential. They could switch the negative confidence-growth feedback loop into a positive one, thus paving the way […]
Emerging Markets’ Euro Nemesis
Gros, Daniel. Emerging markets’ currencies are crashing, and their central banks are busy tightening policy, trying to stabilize their countries’ financial markets. Who is to blame for this state of affairs? Πηγή: www.project-syndicate.org πλήρες κείμενο
Sovereign default risk and banks in Europe’s monetary union
Uhlig, Harald. EZ banks are more exposed to their own nation’s government bonds than ever. This column argues that Eurozone members can now afford to tell their banks to diversify, but pressure from Germany, Austria, France and the ECB might be necessary. Defusing the pernicious entanglement between the Eurozone’s weak banks and weak sovereigns would reduce […]
Saving Europe’s Real Hegemon
Sinn, Hans-Werner Last June, the European Commission announced its about-face on bank restructuring. The money for recapitalizing distressed banks would now come primarily from creditors, not European taxpayers, with a pecking order to specify which lenders would be repaid first. All of this is welcome, at least in principle. In practice, however, the scheme leaves […]
Sovereign debt and its restructuring framework in the euro area
Mody, Ashoka. To compensate for the inflexibility of fixed exchange rates, the euro area needs flexibility through a system of orderly debt restructuring. With virtually no room for macroeconomic manoeuvring since the crisis onset, fiscal austerity has been the main instrument for achieving reductions in public debt levels; but because austerity also weakens growth, public […]
Redesigning the ECB with regional rather than national central banks
Burda, Michael. Eurozone national central banks that take a national perspective risk politicising the ECB’s monetary policy. This column argues that this is a significant risk that should be overcome with a fundamental overhaul of the Eurosystem. A central element would be to take the ‘national’ out of the EZ’s national central banks. Just as […]