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Wolfgang Schäuble, Debt Relief, and the Future of the Eurozone

Mody, Ashoka, (2015), “Wolfgang Schäuble, Debt Relief, and the Future of the Eurozone”, Bruegel publications, 6 Αυγούστου

The reason Schäuble is concerned is that the carefully constructed but fragile crisis management system—intended to insulate Germany from paying the bills of others—is now under threat. If Greece creates a precedent, then either the crisis management system goes, or a transfer union is effectively in place, with Germany on the hook. Hence his call for Greece’s exit is accompanied by an equal vigorous effort to control the budgets the euro area sovereigns. Acrimony is bound to follow, creating deeper divisions in Europe.

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