Overcoming the Euro Crisis and Prospects for a Political Union

Paul Welfens

No disbei210, EIIW Discussion paper from Universitätsbibliothek Wuppertal, University Library

Abstract: The euro crisis and a new debate about immigration in Europe have undermined support for the EU while the unsolved Greek debt problems as well as the ECB's quantitative easing policy have raised new crucial policy issues. It is necessary to identify the key issues of Eurozone stabilization and to clarify the economic benefits from monetary integration. As regards the economic welfare analysis of the euro, the new model presented shows the benefits of the euro's reserve currency position, namely in the framework of a neoclassical growth model with seigniorage based on international reserve holdings. Discounted benefits are about 10 000 € per capita in a stable Euro area. Thus the benefits are bigger than often considered, at the same time one may raise the question of whether the existing institutional setting of the Eurozone is sufficient for achieving long-term stability and prosperity. As regards the envisaged third rescue package for Greece it is emphasized that a haircut of public creditors along with adoption of a Greek capital levy plus privatization efforts are required to achieve debt sustainability and growth. The traditional interpretation of subsidiarity in the EU is found to be misleading and the vertical division of politics is destabilizing.

Keywords: European Union; Economic Integration; Growth; Euro Crisis; Political Union (search for similar items in EconPapers)
JEL-codes: F15 G01 O11 O52 (search for similar items in EconPapers)
Pages: 55 Pages
Date: 2015-07
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://eiiw.wiwi.uni-wuppertal.de/fileadmin/eiiw/ ... _Reihe/disbei210.pdf (application/pdf)

Related works:
Journal Article: Overcoming the euro crisis and prospects for a political union (2016)
Journal Article: Overcoming the euro crisis and prospects for a political union (2016)
Working Paper: Overcoming the EU Crisis and Prospects for a Political Union (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bwu:eiiwdp:disbei210

Access Statistics for this paper

More papers in EIIW Discussion paper from Universitätsbibliothek Wuppertal, University Library
Bibliographic data for series maintained by Frank Hoffmann (frhoff@uni-wuppertal.de).