EconPapers    
Economics at your fingertips  
 

Dealing with the eurozone debt crisis: A proposal for reform

Dennis J. Snower, Johannes Burmeister and Moritz Seidel

No 33, Kiel Policy Brief from Kiel Institute for the World Economy (IfW)

Abstract: The Eurozone faces a fourfold challenge: (1) fiscal support: to provide a credible mechanism for supporting countries with high and rapidly rising national debt and high borrowing costs; (2) fiscal responsibility: to ensure that all member states of the Eurozone credibly commit to sustainable levels of national debt; (3) fiscal autonomy: to permit each member state to determine its own fiscal policy; and (4) counter-cyclical fiscal policy: to allow each member state to pursue fiscal stabilization policy, stimulating the economy in a recession and dampening it in a boom. We outline a proposal for meeting these challenges. The paper is organized as follows. First, we summarize the underlying problems. Second, we present the proposal for over-coming these problems. Third, we consider two potentially important extentions of the pro-posal. Fourth, in the context of a simple model, we assess empirically how this proposal could work for the Greek economy. Fifth, we examine the merits of this proposal in relation to other prominent proposals for dealing with the Eurozone crisis. Finally, we conclude by high-lighting the most important implications of the proposal for the Eurozone.

Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9) Track citations by RSS feed

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/52504/1/668626364.pdf (application/pdf)

Related works:
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:zbw:ifwkpb:33

Access Statistics for this paper

More papers in Kiel Policy Brief from Kiel Institute for the World Economy (IfW) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().

 
Page updated 2020-10-24
Handle: RePEc:zbw:ifwkpb:33