The Eurozone’s Private and Governmental Shock Absorbers: Current Setup and Future Prospects

Nazaré Costa Cabral ()

A chapter in The Euro and the Crisis, 2017, pp 249-269 from Springer

Abstract: Abstract In this chapter, the author analyses the two main types of shock absorbers—private and governmental shock absorbers—that have been proposed after the 2007–2008 financial crisis, even though in some cases their theoretical origins are not new. As for private shock absorbers that imply the reinforcement of ‘market forces’ within the E(M)U, the author indicates certain measures that intend either to ensure the completion of the internal market or to address sectorial market fragmentation, as it is the case of the creation of the Banking Union. As for governmental shock absorbers, the author then distinguishes between macro stabilizing measures that can be implemented outside the EU’s budget (e.g. the creation of a new ‘Debt Agency’ or the institution of a new ‘European unemployment insurance scheme’) and those measures that can be adopted through the EU’s budget. In this latter case, within the current set of (tax) revenues and expenditures, the EU budget might evolve to embrace some stabilization properties, even if significant changes in the design of tax assignment criteria and of funds allocation rules should be required.

Keywords: The Euro crisis; Private shock absorbers; Governmental shock absorbers; Visible and invisible stabilization mechanisms (search for similar items in EconPapers)
JEL-codes: E52 E63 F45 H72 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:spr:fimchp:978-3-319-45710-9_15

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DOI: 10.1007/978-3-319-45710-9_15

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