Krisenreaktion und Krisenprävention im Euro-Raum: Wandel zum Besseren? / Crisis Mangement and Prevention for the Eurozone: A Change for the Better?
Stefan Ried and
ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, 2011, vol. 62, issue 1, 3-28
The economic crisis of 2007 caused a worsening of the public budget in almost all developed economies. Especially GIIPS-countries (Greece, Ireland, Italy, Portugal and Spain) were hit hardest and each of them is posed to the challenge to solve its fiscal crisis. Default, consolidation by inflation and budget consolidation could be considered for crisis management. Furthermore, the European Stabilisation Mechanism was set up permanently to provide relief payments in case of a fiscal crisis of a Eurozone member. There is much to be said for it, but markedly negative incentives are against it. Minimizing the negative effects should be the objective here. Prospectively, the way the reformed Stability and Growth Pact will be executed will be crucial. If the tightening of the pact will be inadequately implemented, the equilibrium within the Eurozone will be shifting permanently to an unopposed free riding.
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