Buti, M., Demertzis, M. & Nogueira Martins, J. (2014) “Delivering the Eurozone Consistent Trinity“, VoxEU Organisation, 30 Μαρτίου.
Although progress has been made on resolving the Eurozone crisis – vulnerable countries have reduced their current-account deficits and implemented some reforms – more still needs to be done. This column argues for a ‘consistent trinity’ of policies: structural reforms within countries, more symmetric macroeconomic adjustment across countries, and a banking union for the Eurozone.
As argued in an earlier commentary, the financial crisis exposed important economic inconsistencies in the way that EMU operated.1 Although progress has been made, the reality is that more needs to be done. A number of countries still need to consolidate their public finances further, and also implement structural reforms to promote growth and sustain satisfactory welfare systems. At the same time, there is a need for vulnerable countries to ensure consistency between regaining competitiveness and the sustainability of private and public debts. Finally, overcoming financial fragmentation is a sine qua non for promoting financial stability while ensuring the effective flow of funds across the monetary union. The institutional/policy mix that addresses these problems comes in the form of a ‘consistent trinity’ that involves: (i) deep fiscal and structural reforms within countries, (ii) a rotation of demand that contributes to a more symmetric adjustment across countries, and (iii) a banking union at the level of the Eurozone as a whole.
Σχετικές αναρτήσεις:
- Gros, D., Alcidi, C., Belke, A. Coutinho, L. & Giovannini, A. (2014) “Implementation of the Macroeconomic Adjustment Programmes in the Euro Area: State-of-Play“, Economic Policy, CEPS Paperbacks, 11 Μαρτίου.
- Veron, N. (2014) “Tectonic shifts – banking union is a long-term process that will dramatically reshape Europe’s financial system”, Bruegel, 7 Μαρτίου.
- Rubio, E. (2013) “Which financial instrument to facilitate structural reforms in the euro area?”, Notre Europe – Jacques Delors Institute, Policy Paper No.104, Δεκέμβριος.