Byon July 1, 2016 RGE EconoMonitor
From Eurotimidity to Euroaudacity
A new proposal has come from a group of leading European economists (the Resiliency Authors) on how to shore up the Eurozone’s resiliency. Their recipe includes diversifying bank portfolios; decreasing banks’ overexposure to domestic loans; transferring the responsibility for banks’ rescue from national governments to the European Stability Mechanism (although the authors consider this option to be politically unfeasible); introducing fiscal expenditure rules (linking expenditure reduction to debt levels); strengthening the ESM, and making it more effective and better coordinated with the ECB; and further adjusting competitiveness with more structural reforms.
Would these measures improve the Eurozone resilience to future bad shocks?
Yet, is resilience the very first priority for the Eurozone at this point in time? Is it really what the Eurozone needs now? Den Rest des Beitrags lesen »