scholarly journals Can Euro Zone Survive and Long Prosper?

2012 ◽  
Vol 4 (2) ◽  
pp. 121-128
Author(s):  
Dapontas Dimitrios
Keyword(s):  
Monetary Policy ◽  
International Organizations ◽  
Debt Crisis ◽  
Credit Crunch ◽  
Future Scenarios ◽  
Political Union ◽  
Euro Zone ◽  
National Currencies ◽  
Optimal Currency Areas ◽  
Short Time

The current problems on the aftermath of the global credit crunch left the weakest Euro countries in the turbulence of a debt crisis, which has been spread in five countries (Greece, Ireland, Portugal, Italy and Spain respectively) and raised the question of a Euro zone future survival. The surviving barriers have to do with limitations and restrictions on the single market, the lack of political union and different monetary policy targets. Incentives to secede are also present. However, a possible withdraw of a country would have high cost for all the participants and it could lead to monetary union’s demolition. The costs related with a possible withdraw are high, thus it is difficult for a country to leave a union. In the recent debt crisis, the countries accepted bailouts from their counterparts and international organizations in order to prevent the Euro zone collapse spreading the crisis further. Three possible Euro zone future scenarios are analyzed. The volunteer or not breakup of the union and reintroducing of national currencies, the breakup of the Euro zone to two currencies consisting Optimal Currency Areas (OCAs)is analyzed by using thirteen equally weighted optimum area criteria and the imposition of an interest equalization tax(IET) in order to make the Euro zone a single OCA. The results show that the asymmetries lead to the crisis persists in a possible two Euros area and this scenario cost is higher than union dissolution’s. An IET can help Euro zone in the short time to develop sustainable characteristics.

From Monetary to Fiscal to Political Union: A Progression to Integration or a Recipe for Failure?

2020 ◽  
Vol 23 (2) ◽  
pp. 469-488
Author(s):  
Massimo D’Antoni
Keyword(s):  
Monetary Union ◽  
Debt Crisis ◽  
Point Of View ◽  
European Monetary ◽  
Macroeconomic Policies ◽  
Political Union ◽  
Economic Point ◽  
Structural Differences ◽  
Optimal Currency Areas ◽  
Set Up

Abstract In this paper, we discuss the limits of the architecture of the euro from an economic point of view. We first highlight how the choice to create a monetary union was not supported by the accepted theory of optimal currency areas, and how its institutional set-up responded to a special and questionable view of the functioning of the economy, which recognized only a limited role to active macroeconomic policies. We continue by reconstructing the reasons for the emergence of the 2010–2011 debt crisis that can be traced back to the dynamics triggered by the single currency itself, and we highlight the role played by structural differences between various models of capitalism. Finally, we argue that the proposals currently on the table are by no means sufficient to correct the flaws in the European monetary architecture. The prospects are therefore pessimistic about the possibility of monetary union evolving towards a fiscal and political union.

scholarly journals Economic Growth in the Euro Zone Countries and Other Member States of the European Union in the Years 2006 - 2017 - Comparative Analysis

2018 ◽  
Vol 57 ◽  
pp. 01011
Author(s):  
Krzysztof Dobrowolski ◽  
Grzegorz Pawłowski
Keyword(s):  
Consumption Expenditure ◽  
The European Union ◽  
Common Currency ◽  
Non Profit ◽  
Euro Zone ◽  
Final Consumption ◽  
National Currencies ◽  
General Government ◽  
Level Of Economic Development ◽  
The Common

The aim of the conducted research is to verify III hypotheses. Hypothesis I: changes in GDP and its components should demonstrate higher dynamics in the euro zone countries than in countries using national currencies, taking into account differences in their level of economic development. Hypothesis II: in countries that joined the euro zone during the period under examination, the analyzed indicators should demonstrate higher dynamics after the adoption of the common currency. Hypothesis III: the index of final consumption expenditure of general government should demonstrate lower dynamics in the euro zone countries and a decline in dynamics after the adoption of the euro in the countries that have done so during the period considered. Statistical material was analyzed. Data on GDP dynamics, investments, final consumption expenditure of households and non-profit institutions serving households (later referred to as: "final consumption expenditure"), final consumption expenditure of general government, export and import were used. The research methods used were: the method of analysis and logical construction and a statistical one. The hypotheses tested were only partially confirmed.

The Euro Zone and the Sovereign Debt Crisis

2017 ◽  
Author(s):  
George Allayannis ◽  
Adam Risell
Keyword(s):  
Sovereign Debt ◽  
Debt Crisis ◽  
Sovereign Debt Crisis ◽  
Euro Zone

scholarly journals Enhanced Economic Governance in the EU: Alternative to a Political Union?

2014 ◽  
Vol 37 (1) ◽  
pp. 10-35 ◽  
Author(s):  
Elżbieta Kawecka-Wyrzykowska
Keyword(s):  
Debt Crisis ◽  
Point Of View ◽  
List Type ◽  
Economic Governance ◽  
Political Union ◽  
Political Will ◽  
Member States ◽  
Eu Member States ◽  
Realistic Approach ◽  
The Eu

Abstract In reaction to the sharp deterioration of fiscal positions and a sovereign debt crisis in the majority of EU member states, EU leaders have been strengthening the EU economic governance framework, in particular for the eurozone member states. This has been reflected mainly through a reinforcement of the Stability and Growth Pact (SGP) within the so-called six-pack and through the recent adoption of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union (TSCG). The objective of this paper is to present the main decisions taken to address intensifying problems in the EU and assess them from the point of view of stability of the eurozone. The paper argues that the recent adoption of the six-pack and of the TSCG has created a legal basis for more effective governance structure that is much stronger than previously, and closer fscal coordination among EU member states in order to ensure public fnance sustainability. The practical results will depend, however, on the political willingness of countries to accept the new rules and rigorous enforcement of those rules. Most of the new solutions continue the previous approach: stricter preventive and punishing rules, and their more rigorous application. TSCG has adopted a new element: parallel to EU rules, there should be enhanced national rules (possibly in the form of constitutional commitments) and national institutions responsible for fscal discipline. This approach implies that international rules are not strong enough for sovereign countries, which agree to be subject to democratically elected national authorities but do not want to follow decisions by “outside” institutions. In addition, reverse voting in the Council encourages for more pragmatic, economically justifed use of the modifed SGP. In view of a lack of political will to move forward into a political union, this seems the only realistic approach to ensure fscal stabilization and keep the eurozone alive in the short and medium run. Two main research methods have been applied: (a)Statistical analysis of data on changes of the public fnances in the EU member states (budgetary defcit and public debt), (b)comparative analysis of successive EU documents on strengthening economic governance and identifcation of strong and weak aspects of the new documents from the point of view of stability of the eurozone. The main conclusion is that in a situation of a lack of political will to move forward into a political union, the only realistic approach to ensure fscal stabilization and keep the eurozone alive in the short and medium term seems to be to enforce rigorously the recently adopted new commitments aiming at better fscal control of euro area members.

scholarly journals Challenges for monetary policy in the enlarged European monetary Union

2009 ◽  
Vol 56 (1) ◽  
pp. 95-110 ◽  
Author(s):  
Irena Radovic
Keyword(s):  
Monetary Policy ◽  
Monetary Union ◽  
Central And Eastern Europe ◽  
European Monetary ◽  
Policy Modeling ◽  
Euro Zone ◽  
European Central ◽  
Currency Policy ◽  
Voting Mechanism ◽  
Critical Aspects

The eastward enlargement of the Euro area entails significant implications for the accession candidates in Central and Eastern Europe (CEE), the existing Euro system and the monetary policy of the European Central Bank (ECB). The present analysis assesses the challenges and critical aspects in monetary policy modeling with special emphasis to enlargement. The focus is on the difficulty of implementing a unique currency policy in view or growing heterogeneity within the enlarged monetary union, and secondly - the issue of the voting mechanism within the ECB. When analyzing those two issues, it is conclusive that the difficulties for the ECB and the current Euro zone members will increase. For the enlarged Euro zone, which is becoming more divergent, it will be very hard to find adequate recipes to meet the needs and requirements of all. The big question is: whether centralization of monetary policy is a sustainable and superior solution?.

scholarly journals ECB policy responses between 2007 and 2014: A chronological analysis and an assessment of their effects

2016 ◽  
Vol 63 (4) ◽  
pp. 455-473 ◽  
Author(s):  
Carlos Rodríguez ◽  
Carlos Carrasco
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Interest Rates ◽  
Sovereign Debt ◽  
Global Financial Crisis ◽  
Debt Crisis ◽  
Lender Of Last Resort ◽  
Policy Responses ◽  
The One ◽  
The Global Financial Crisis

The paper analyses the monetary policy responses of the European Central Bank (ECB) to the global financial crisis and the European sovereign debt crisis. Our goals are on the one hand to explain chronologically the main measures in conventional and unconventional policies adopted by the ECB and on the other hand to analyse their effects on key interest rates, monetary aggregates and the money multiplier. The assessment is that the ECB?s monetary policy responses to the crisis have been ?too little, too late?, constrained by the institutional framework, which prevents the ECB from acting as a true central bank with the role of lender of last resort.

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