Arbeitspapier
The Euro-project at risk
In contrast to Robert Mundell's Optimum Currency Area theory and his recommendation of forming a monetary union, the economic fundamentals of Euro area member countries have not harmonized. The opposite holds: the Euro core countries - most of all Germany, but also the Netherlands and Finland - increased productivity growth while limiting nominal wage growth. However, Mediterranean countries - particularly Greece, but also Spain, Portugal, and Italy - have dramatically lost international competitiveness. Although the overall balance of payments for the Euro area at large is almost balanced, internal disequilibria are skyrocketing and default risk premiums and tensions within the Euro area are rising, thus jeopardizing the stability of the monetary union. The findings confirm that a common currency without fiscal union is inherently unstable. The international financial and economic crisis has merely triggered events which highlight this instability. The paper discusses three possible scenarios for the future of the Euro: a laissez faire approach, a bailout, and finally an exit strategy for the Mediterranean countries, or an organized exit by a group of core countries led by Germany, forming their own smaller monetary union.
- Sprache
-
Englisch
- Erschienen in
-
Series: ZEI Working Paper ; No. B 04-2010
- Klassifikation
-
Wirtschaft
Monetary Systems; Standards; Regimes; Government and the Monetary System; Payment Systems
Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
Economic Integration
International Monetary Arrangements and Institutions
International Lending and Debt Problems
- Thema
-
Optimum currency areas
monetary union
risk spreads
central banking
exchange rates
fiscal policy
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Hankel, Wilhelm
Hauskrecht, Andreas
Stuart, Bryan
- Ereignis
-
Veröffentlichung
- (wer)
-
Rheinische Friedrich-Wilhelms-Universität Bonn, Zentrum für Europäische Integrationsforschung (ZEI)
- (wo)
-
Bonn
- (wann)
-
2010
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:45 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Hankel, Wilhelm
- Hauskrecht, Andreas
- Stuart, Bryan
- Rheinische Friedrich-Wilhelms-Universität Bonn, Zentrum für Europäische Integrationsforschung (ZEI)
Entstanden
- 2010
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