Making the euro viable: the Euro Treasury Plan

Bibow, JÃ¶rg

doi:10.4337/ejeep.2016.01.07

Cited by 6 publications

(4 citation statements)

References 4 publications

(2 reference statements)

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“…Applying this general approach to the Eurozone could either aim at a relevant federal EU budget with a EU/Eurozone fiscal authority issuing debt, which will then be accepted by the ECB as collateral, as for example proposed by Bibow (2016). However, this would require major institutional changes, which might be difficult to obtain in the short to medium run.…”

Section: A Kaleckian/post-keynesian Policy MIX For the Eurozonementioning

confidence: 99%

The Eurozone in Crisis — A Kaleckian Macroeconomic Regime and Policy Perspective

Hein

Martschin

2020

Review of Political Economy

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The current Covid-19 Crisis 2020 has hit the Eurozone in a highly fragile situation, with a weak and asymmetric recovery from the Great Financial Crisis, the Great Recession and the following Eurozone Crisis. These crises have also revealed the weaknesses of the macroeconomic policy institutions and strategies of the Eurozone based on New Consensus Macroeconomics (NCM). Applying a Kaleckian/post-Keynesian analysis of the demand and growth regimes to the EA-12 countries, we show that the internal imbalances within the EA-12 before the Eurozone crisis, with the polarization of current account deficit debt-led private demand boom countries, on the one hand, and of current account surplus export-led mercantilist countries, on the other hand, have been externalized since then. Most of the countries and the EA-12 as a whole have now turned export-led mercantilist. For an economic policy alternative favouring a domestic demand-led regime, we turn towards Kalecki's macroeconomic policy proposals for achieving and maintaining full employment in a capitalist economy by government deficit expenditures, in combination with redistribution policies in favour of labour and low-income households, assisted by central banks targeting low interest rates. This approach is then applied to the Eurozone, in order to derive a policy mix which should contribute to a more rapid recovery from the Covid-19 Crisis and to a medium-to long-run non-inflationary full employment domestic demand-led regime, on the one hand, and to sustainable catching-up of the periphery of the Eurozone with respect to the more mature centre, on the other hand.

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Section: A Kaleckian/post-keynesian Policy MIX For the Eurozonementioning

confidence: 99%

The Eurozone in Crisis — A Kaleckian Macroeconomic Regime and Policy Perspective

Hein

Martschin

2020

Review of Political Economy

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“…It needs to overcome the monetary-fiscal 'divorce' and establish a central monetaryfiscal axis of power instead. My 'Euro Treasury' proposal (Bibow 2013;2014;2015;2019a;2019b) provides a straightforward solution to the latter systemic deficiency.…”

Section: Concluding Observationsmentioning

confidence: 99%

Stuck on the wrong track: 20 years of euro disillusion, denial, and delusion*

Bibow

2020

European Journal of Economics and Economic Policies: Intervention

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This contribution assesses the functioning of Europe's Economic and Monetary Union (EMU) during the first 20 years of the euro's existence. It argues that two formative intellectual currents converged at Maastricht to shape the design and reception of the euro regime: ordoliberalism and neoliberalism. Germany's ordoliberalism inspired and shaped the euro regime design. Neoliberalism fashioned the reception of what was agreed at Maastricht under the influence of Bundesbank dogma and power. As a product of the zeitgeist, Europe got stuck with a deeply flawed euro regime. The Maastricht Treaty institutionalized an asymmetric (growth-unfriendly) policy regime. This suited the macroeconomic mainstream well, fighting the ‘1970s stagflation war’ for the past 40 years. Twenty years of euro disillusion have produced the exact opposite: ‘stagdeflation.’

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“…Diaz del Hoyo, Dorrucci, Heinz, and Muzikarova (2017), Zuk, Polgár, Savelin, Diaz del Hoyo, and König (2018), Arestis (2016), Bibow (2016) concluded that the temporary fulfilment of the numerical convergence criteria set in the Maastricht Treaty was not, in itself, a guarantee of smooth membership in the euro area (see further details of the Maastricht Treaty in Section 2.1). A holistic approach and the integration of all dimensions of sustainable economic convergence -be these real, nominal or institutional in nature -is, therefore, required.…”

Section: Introductionmentioning

confidence: 99%

Ready or not? Constructing the Monetary Union Readiness Index

Erhart

2022

Journal of Central Banking Theory and Practice

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While all EU Member States can join the group's monetary union, the euro area, some members are far more ready for the adoption and use of the single European currency. Here, we construct a new Monetary Union Readiness Index (MURI) for the EU Member States. The theoretical framework of the index is built on the economic theory of Optimal Currency Areas and EU regulations such as the Treaty and the Maastricht criteria, and the Regulation on the Macroeconomic Imbalance Procedure. The index measures (i) nominal convergence, (ii) real convergence, and (iii) macroeconomic stability. The MURI Index provides an easy to use real-time policy tool to evaluate both candidate and current euro area members. Hence, it complements, aggregates and communicates key information in annual convergence reports and in official statistics. Our evaluation finds that Austria, Finland, Denmark, Sweden and Germany showed the highest level of compliance with the different euro area criteria in 2018, while Greece, Cyprus, Romania, Spain, and Italy were the least compliant.

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Making the euro viable: the Euro Treasury Plan

Cited by 6 publications

References 4 publications

The Eurozone in Crisis — A Kaleckian Macroeconomic Regime and Policy Perspective

The Eurozone in Crisis — A Kaleckian Macroeconomic Regime and Policy Perspective

Stuck on the wrong track: 20 years of euro disillusion, denial, and delusion*

Ready or not? Constructing the Monetary Union Readiness Index

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