scholarly journals The Resilience of the Euro

2021 ◽  
Vol 35 (2) ◽  
pp. 3-22
Author(s):  
Philip R. Lane
Keyword(s):  
Central Bank ◽  
Euro Area ◽  
Public Debt ◽  
Risk Premia ◽  
Policy Support ◽  
Economic Recovery ◽  
Common Currency ◽  
Institutional Reforms ◽  
Fiscal Capacity ◽  
The Common

Over 2014 – 2019, the euro area charted a substantial post-crisis economic recovery while also reducing macro-financial vulnerabilities. The array of post-crisis institutional reforms has improved the capacity of the euro area to withstand adverse shocks, even if the narrowing of imbalances also came at a high cost (especially in the most indebted member countries). The pandemic has provided a new test: the combination of a common central bank and the enlargement of the common fiscal capacity has provided substantial policy support and fostered a narrowing in risk premia, despite significant differences in levels of public debt and exposures to the pandemic shock. While the resilience of the euro is sure to be tested further in the coming years, the extent of the underlying political backing for the common currency should not be underestimated.

scholarly journals COMPARATIVE ANALYSIS OF STRUCTURAL Σ-CONVERGENCE OF EXPORTS

2020 ◽  
Author(s):  
Vera Pirimova ◽  
Keyword(s):  
Comparative Analysis ◽  
Euro Area ◽  
Graphical Form ◽  
Economic Convergence ◽  
Common Currency ◽  
Dissimilarity Index ◽  
Index Method ◽  
Analysis And Synthesis ◽  
The Common ◽  
Degree Of Similarity

The paper analyses the structural σ-convergence of exports of six CEE countries to the Euro area. The countries are Estonia, Latvia, Lithuania, Slovakia, and Slovenia, which are members of the Euro area, as well as Bulgaria, which was included in the ERM II currency mechanism on 10.07.2020. The main goals are to measure and compare the structural σ-convergence of exports of the six CEE countries and to prove whether the introduction of the common currency (the euro) has an impact on the convergence. The research consists of the theoretical and empirical parts. The theoretical part systematizes basic concepts of economic, trade, club, and structural convergence. One index method used by his authors to study economic convergence has been adapted to the structural σ-convergence of exports. This is the dissimilarity index of Von Hagen and Traistaru. In the empirical part, the values of the index, by commodity groups, according to SITС, Rev. 4, for the six countries during the period 2002-2018 are determined. The index is calculated also as aggregated, referring to the total exports of the selected countries and for the whole period. The results are presented in graphical form. Based on them, the structural and dynamic characteristics of the convergence and divergence of exports of the six countries compared to the exports of the Euro area are derived. Conclusions are made about achieved the different degree of similarity, that is uncertain and unstable and so the convergence can be only partially attributed to the adoption of the euro. Methods of analysis and synthesis, induction and deduction, methods of the empirical index, and comparative analysis are applied.

scholarly journals Towards a more resilient euro area

2019 ◽  
Vol 8 (2) ◽  
pp. 106
Author(s):  
Esther Gordo ◽  
Ivan Kataryniuk
Keyword(s):  
Euro Area ◽  
Capital Markets ◽  
Risk Sharing ◽  
Common Currency ◽  
Monetary Unions ◽  
Economic Resilience ◽  
Currency Area ◽  
The Us ◽  
The Common ◽  
Lower Capacity

The euro area has shown lower capacity to resist shocks than other monetary unions, such as the US. One possible determinant is the lack of risk-sharing mechanisms. In this article, we estimate the risk-sharing capacity of the Euro Area according to the Asdrubali et al. (1996) methodology. The results show that the degree of risk-sharing is low in the euro area, in particular, due to underdeveloped capital markets and the lack of a central fiscal capacity. We suggest venues of reform to increase the economic resilience of the common currency area.

The current economic and debt crisis in eurozone and crisis of grand theories of European integration

Human Affairs ◽  
2013 ◽  
Vol 23 (3) ◽  
Author(s):  
Dušan Leška
Keyword(s):  
European Integration ◽  
Euro Area ◽  
Social Constructivism ◽  
Debt Crisis ◽  
Economic Recession ◽  
Banking Union ◽  
Common Currency ◽  
Eu Member States ◽  
Liberal Intergovernmentalism ◽  
The Common

AbstractThe economic and debt crisis threaten many eurozone countries and the very existence of the common currency, the euro. The crisis has meant that some special mechanisms have had to be created (EFSF, ESM) and the introduction of special procedures in heavily indebted countries. The deepening of the crisis and the economic recession in the euro area have resulted in the growth of nationalism and anti-European sentiments in EU member states. Resolving the crisis, however, requires further convergence of the eurozone countries, the formation of a fiscal union and a banking union. At the same time, the crisis has shown that the grand theories of European integration, neo-functionalism and liberal intergovernmentalism, have failed to provide answers to the questions raised by the crisis, and this has led to the growing importance of social constructivism.

scholarly journals Aspects of divergence in the Euro Area

2020 ◽  
pp. 9
Author(s):  
Nicos Christodoulakis
Keyword(s):  
Euro Area ◽  
Capita Income ◽  
Capital Formation ◽  
Common Currency ◽  
Policy Initiatives ◽  
Convergence Process ◽  
Quality Of Institutions ◽  
The Common ◽  
Per Capita

The paper examines how the convergence process between the less and the more developed members of the Euro Area weakened significantly after the circulation of the common currency, and subsequently reversed course in the postcrisis recession. The front-loaded consolidation programs that followed the bailouts in the over-indebted economies caused asymmetric losses in per capita income in the peripheral countries and led to further North-South polarization. The paper identifies public indebtedness, quality of institutions and capital formation as the areas where divergences are more pronounced and suggests that policy initiatives to encourage more investment and a faster institutional assimilation are needed for the convergence process in the Euro Area to take off again.

scholarly journals Revisiting the “Keynes Plan” for an International Clearing Union in a Eurozone Perspective

2020 ◽  
Vol 1 (2) ◽  
pp. 287
Author(s):  
Alkinoos Emmanouil-Kalos
Keyword(s):  
Central Bank ◽  
European Central Bank ◽  
Structural Reforms ◽  
Common Currency ◽  
State Of Emergency ◽  
European Central ◽  
The Core ◽  
Macroeconomic Imbalances ◽  
The Common ◽  
The Eu

The last decade has been turbulent for the EMU, with many structural weaknesses becoming apparent. While in a state of emergency, the European Central Bank has had to “reinvent” itself in order to stabilize the Eurozone, while the vital importance of the imbalances between the member states has been recognized, as the establishment of the Macroeconomic Imbalances Procedure (MIP) indicates. Yet, it is widely acknowledged that the architecture of the Eurozone needs structural reforms. This policy brief aims to present the case for the adoption of the core ideas of the “Keynes Plan” for an International Clearing Union, which could function as an important first step towards fighting intra-eurozone imbalances, hence strengthening the EMU. Given the existence of the European Central Bank and the common currency, a moderate version of such a plan could be implemented even without the need for any changes in the EU treaties, and could be the stepping stone for further economic integration.

scholarly journals Banking union through Hungarian eyes–assessment of a possible close cooperation

2017 ◽  
Vol 6 (1) ◽  
pp. 63-77
Author(s):  
Anikó Szombati
Keyword(s):  
Central Bank ◽  
Crisis Management ◽  
Euro Area ◽  
Banking Union ◽  
Insurance Fund ◽  
Member States ◽  
Supervisory System ◽  
Close Cooperation ◽  
The Common ◽  
Institutional System

Legislation laying down the first two pillars of the institutional system of the Banking Union was finalised in April 2014. In accordance with the regulations, non-euro area Member States, including Hungary, may notify the ECB at any time if they wish to participate in the common system even before the euro is adopted. The paper aims at summarising the possible pros and cons vis-à-vis the Banking Union from a Hungarian perspective. It highlights the reasons for not opting in at the inception of the new supervisory system and also gives indications about those major milestones that could give rise to the reconsideration of the present position. In its existing form, the single supervisory and crisis management mechanism has not achieved the initial target, i.e. the separation of the stability of national banking systems and the fiscal capacity of Member States and the elimination of interdependencies. In addition, close cooperation implies weaker powers than those provided by actual membership, and the separation of central bank and supervisory functions carries risks in non-euro area countries. By contrast, the attraction of Banking Union membership lies in the opportunity to join a uniform European system, a wider analyst base and ultimately, the “ammunition” of the EUR 98 billion available for crisis management in comparison to the Hungarian banking system. In October 2013, a uniform supervisory system integrated into the central bank was set up in Hungary, and the domestic resolution institutional system was complete by the end of 2014. Therefore, until the finalisation of the Banking Union through the creation of the common deposit insurance fund and a common fiscal backstop, it is reasonable to put the decision to join on hold; indeed, such a decision should be made in light of several factors presented in this study.

scholarly journals Parallel Currency Regimes in the Area of Financial Integration

2019 ◽  
Vol 19 (4) ◽  
pp. 5-13
Author(s):  
Mikhail V. Zharikov
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Financial Integration ◽  
Practical Significance ◽  
Common Currency ◽  
Single Currency ◽  
Parallel Currency ◽  
The Common ◽  
National Governments ◽  
Money Circulation

The study presented in the article seems rather relevant due to the fact that the problem of indebtedness in the eurozone members has not been solved yet, and these countries still continue to accumulate debts. Therefore, the eurozone members are expected to find effective ways to restore competitiveness after the crisis of 2009‒2012 without exiting the single currency agreement. The research is aimed at encompassing the relations which come into being as a result of credit use, money circulation, and money transfer payments. Consideration of these issues seems very important since it can help restore the loss of monetary independence. The subject of the article is the ways to denominate debt securities in the currency units under the control of the national governments and the central bank. The main purpose of the paper is to develop the approaches to parallel circulation of a single currency unit which can be devalued to solve the debt problems. The practical significance of the article lies in the possibility to use the European experience in solving the problems of common currency circulation in the process of Eurasian currency and financial integration. In terms of economic theory, the results and general outcomes of the work are important for the development of a concept to rationalize monetary policy and money circulation. In conclusion, the article proposes a parallel currency circulation regime which allows a member country of the currency agreement to stay in the common currency area and retain some functions of the monetary policy which were sacrificed due to the creation and operation of the common central bank.

Why do the national financial and monetary policies not boost the economy?

2020 ◽  
Vol 26 (7) ◽  
pp. 1496-1521
Author(s):  
N.I. Kulikov ◽  
M.A. Kulikova ◽  
A.A.S.R. Mobio
Keyword(s):  
Central Bank ◽  
Policy Support ◽  
Gdp Growth ◽  
Government Contracts ◽  
Monetary Policies ◽  
The Past ◽  
Russian Economy ◽  
Yearly Average ◽  
Analysis And Synthesis ◽  
The Government

Subject. This article assesses the reasons why the economic policy of the Government and Central Bank of Russia does not cause the economic advance. The article tries to find out why the two strategic programmes adopted over the past ten years have not been implemented in most indicators. Objectives. The article aims to analyze the results of financial and monetary policies in Russia over the past ten years, and establish why the Russian economy has been growing within one percent yearly average all these years, and its share in the world economy has not grown, but got reduced even. Methods. For the study, we used the methods of analysis and synthesis. Results. The article proposes certain measures and activities to move to soft financial and monetary policies of the State and corresponding changes in the structure of the Russian economy. This will help ensure six to seven percent GDP growth annually. Conclusions. High loan rates have become the main obstacle to GDP growth in Russia. It is necessary to accept concrete actions and decisions concerning the Bank of Russia key rate, expansion of the functions of the Central Bank of the Russian Federation, industrial policy, support of consumer demand, long-term government contracts for the real sector enterprises, etc.

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