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Towards a Resilient Eurozone

Economic, Monetary and Fiscal Policies

Edited By John Ryan

This book examines the Eurozone crisis and the possibility of fiscal and political union in Europe, with contributions from some of the most respected experts on these topics. The book explains the complex, multidimensional crises in competitiveness, fiscal matters, banking and politics. During the crisis Germany has been criticized for misjudging the causes, focusing too much on fiscal deficits and insisting that the solution is fiscal consolidation and austerity. For many, especially those inspired by Keynesian economics, Germany has been seen as pushing the whole continent into a depression. By misjudging the causes of the crisis, insisting on widespread austerity, constraining the European central Bank (ECB) in its role of Lender of Last Resort for the sovereigns, rejecting the mutualization of Eurozone debt and providing financial help in small amounts and too late, Germany is perceived to be responsible for the possible break-up of the Eurozone. The aim of this book is to analyse whether this description, one that is shared by numerous policymakers, academics, pundits and opinion leaders, means that there is a lack of resilience in the Eurozone’s economic, monetary and fiscal policies.
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Maastricht 2.0: Alternatives for Monetary Union beyond the Centralization Fetish



The continuing financial crisis in some member countries of the eurozone has intensified the debate about reforms of the monetary union. Whilst the crisis appears to have been resolved, the structural difficulties of the eurozone remain unresolved. The original architecture of the Treaty of Maastricht did not prevent the outbreak of the crisis and thus has to be revised. The two alternatives suggested by the proponents of deeper integration – either deeper integration regarding monetary and fiscal policy, or a return to antagonistic, national policies – are far from being inevitable. By contrast, it is possible to make the monetary union more crisis-proof while at the same time giving the European nations a high degree of responsibility for their own economic development. The frequently cited assertion that transferring – i.e., centralizing – hitherto national competencies to the European level would make fiscal policy and financial regulation easier to manage does not convince. That approach ignores the downside of centralization. Far-reaching centralization may result in new problems and will weaken, not strengthen the economic dynamism of the EU.

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