Reformation or exodus: Assessing the future of the Euro

Martin Watts, Timothy Sharpe and James Juniper
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Martin Watts: The University of Newcastle, Australia
Timothy Sharpe: Nottingham Trent University, UK
James Juniper: The University of Newcastle, Australia

The Economic and Labour Relations Review, 2014, vol. 25, issue 3, 465-483

Abstract: Eurozone economies were the most adversely affected by the Global Financial Crisis, with forecast macroeconomic outcomes still highly uncertain. This article argues first that the Eurozone policy framework can be viewed as neo-liberalism overlaid with policy constraints associated with a mis-specified Optimum Currency Area. We are critical of this framework since it is incompatible with the policy sovereignty that is experienced, if not utilised, by sovereign economies such as the USA, UK and Australia. Second, recent and proposed policy reforms which generally lie within the constraints of the Eurozone framework are examined. We conclude that these policies are piecemeal and fail to restore policy sovereignty, which ultimately requires that member countries exit the Eurozone. Key issues associated with such an exit are briefly discussed.

Keywords: European Monetary Union; fiscal and monetary policy; Global Financial Crisis; sovereignty (search for similar items in EconPapers)
JEL-codes: E24 E61 F33 H11 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:sae:ecolab:v:25:y:2014:i:3:p:465-483

DOI: 10.1177/1035304614544273

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