The Eurozone Needs Exit Rules

Fahrholz, Christian; Wójcik, Cezary

doi:10.2139/ssrn.2092634

Cited by 4 publications

References 12 publications

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From the American Financial Meltdown to the European Banking and Public Debt Crises

Moro

2016

Financial and Monetary Policy Studies

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In this chapter, we analyze how, via the banking system, the financial contagion was extended from the US to Europe. In fact, we observe the extension of the Great Crisis from the international banking system to the European sovereign debts. The problem is that the expansionary fiscal policies of deficit spending implemented by most States to tackle the crisis have created very large deficits, which are difficult to adjust in the short run. To save banks, private debt became public debt. At the same time, with deteriorating public finances, sovereign risk has increased and worsened bank’s balance sheets. In fact, in European countries it is really a sequence of interactions between sovereign problems and banking problems. The genesis of these interactions also focuses on the imbalances in European Monetary Union (EMU) countries balance-of-payments. The European crisis has shown that it can spread quickly among closely integrated economies, either through the trade channel or the financial channel, or both

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From the American Financial Meltdown to the European Banking and Public Debt Crises

Moro

2016

Financial and Monetary Policy Studies

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Die ‚Troika‘ als internationale Akteurin: Eine institutionenökonomische Analyse

Marx¹

2014

List Forum

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Can the Euro Survive?

Haidar

2014

World Economy

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One of the fascinating aspects of the European debt crisis has been the resilience of the euro. For much of 2011, the euro was a key reserve currency, oblivious to the chaos ravaging European economies. Now, however, the gravity of the crisis is finally dragging down the euro. As the Euro zone debt crisis enters its third uncertain year, the question about whether the euro can survive rises. This paper argues that the euro can survive given policymakers still have in hand various tools. These tools include creating exit rules, implementing new stabilisation rules and instruments, adopting new fiscal policy, introducing conditional Eurobonds, using inflation differentials and providing more independence to the European Central Bank.

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The Eurozone Needs Exit Rules

Cited by 4 publications

References 12 publications

From the American Financial Meltdown to the European Banking and Public Debt Crises

From the American Financial Meltdown to the European Banking and Public Debt Crises

Die ‚Troika‘ als internationale Akteurin: Eine institutionenökonomische Analyse

Can the Euro Survive?

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