Too early to sound the alarm

Manfred J M Neumann, 17 April 2012

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Debt finance of public consumption has clearly gone too far in several countries. Too far in the sense that it has reached if not exceeded the borderline of sustainability. Have austerity measures meanwhile gone too far, too?

Topics: EU policies, Macroeconomic policy
Tags: austerity, eurozone, fiscal policy

The EZ breakup contest: Take ignorance seriously

Richard Baldwin, 10 April 2012

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The Eurozone might not survive in its current form. Buiter and Rahbari (2012) put a likelihood of 50% on Greek exit – an event that would be something between an historic event and a global economic catastrophe (depending on how it was handled).

Topics: Macroeconomic policy
Tags: eurozone, EZ breakup contest, Greek exit

The problems of European monetary union – asymmetric shocks or asymmetric behaviour?

Andrea Boltho, Wendy Carlin, 31 March 2012

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Much of the literature that was sceptical of the prospective success of the euro feared the effects of Mundellian asymmetric shocks on an area which (unlike the US) had little inter-country labour mobility and no common fiscal policy.

Topics: Europe's nations and regions
Tags: eurozone, governance, growth

From vicious to virtuous: A five-point plan for Eurozone restoration

Marco Buti, Pier Carlo Padoan, 27 March 2012

Download CEPR Policy Insight No. 61 here [1]. [1] http://voxeu.org/sites/default/files/file/PolicyInsight61.pdf

URL: http://www.cepr.org/pubs/PolicyInsights/CEPR_Policy_Insight_061.asp
Topics: Macroeconomic policy
Tags: eurozone, fiscal consolidation, growth

From a vicious to a virtuous circle in the Eurozone - the time is ripe

Marco Buti, Pier Carlo Padoan, 27 March 2012

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The economic and financial crisis in the Eurozone is in its fourth year. In late 2011, it had evolved dangerously into a vicious circle of sluggish growth, tensions in sovereign debt markets and banking sector fragility.

Topics: Macroeconomic policy
Tags: eurozone, fiscal consolidation, growth

Fiscal consolidations for debt-to-GDP ratio containment? Maybe … but with much care

Gianluca Cafiso, Roberto Cellini, 20 March 2012

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In recent time a wide debate has been developing concerning the effects of restrictive fiscal policies on the dynamics of the debt-to-GDP ratio (eg Corsetti and Müller 2012). The debate is nourished by the current experience of EU countries, where fiscal-consolidation policies are implemented.

Topics: Macroeconomic policy
Tags: austerity, debt, eurozone

Fed versus ECB: How Target debts can be repaid

Hans-Werner Sinn, 10 March 2012

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Now that Bundesbank President Jens Weidman has expressed his concern about the rising TARGET balances within the Eurozone in an official letter to Mario Draghi, the issue can no longer be swept under the carpet. In February, the Bundesbank had a TARGET claim of €547 billion on the Eurosystem, while the Dutch central bank had one of €171 billion in January.

Topics: International finance
Tags: ECB, eurozone, TARGET2

Brinkmanship in Brussels, Sturm and Drachma for Greece and Europe

Jacob Funk Kirkegaard, 1 March 2012

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Just as it did when Congress recently extended the payroll tax cut, brinkmanship has produced an early-morning deal in Europe to extend a new lifeline to Greece and clear the way for the biggest sovereign bond restructuring in history.

Topics: International finance
Tags: eurozone, Greece, IMF

Apart from the fiscal compact – on competitiveness, nominal wages and labour productivity

Marga Peeters, Ard den Reijer, 3 January 2012

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Eurozone members that face the consequences of severe asymmetric shocks can, in the absence of labour mobility, accommodate by means of fiscal transfers. In order to avoid becoming a one-way transfer union from the core to the periphery, the EU needs to address structural imbalances and persistent current-account deficits and surpluses that are due to real exchange-rate misalignment.

Topics: EU policies, Productivity and Innovation
Tags: eurozone, productivity, wages

Deleveraging in the Eurozone

Vincent O'Sullivan, Stephen Kinsella, 17 December 2011

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The capital shortfall at EU banks is 8% higher than originally thought, according to the latest assessment from the European Banking Authority (EBA 2011) released on 8 December.

Topics: Financial markets, International finance
Tags: banks, eurozone, leverage

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