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by okeuro49
902 days ago
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> their membership in the EU single market. Which is likely negated by the membership of the Euro single currency. > The German economy was relatively prosperous by 2012, and European monetary policy was far too tight for weaker economies. Portugal, Italy, Ireland, Greece, and Spain all faced high debt, high interest rates, and high unemployment. This time, monetary policy was too tight rather than too loose. The only constant was that the euro continued to work in favor of Germany. https://www.investopedia.com/ask/answers/09/euro-introductio... They would be far better served by a single market, without the Euro. |
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This is an article that explores one way to achieve this given political reality, that the "North" would be sending money to the "South" if implemented, yet both North and South benefit from the Euro system continuing:
https://www.cambridge.org/core/journals/european-review/arti...
> An EU Fiscal Union is being discussed as a way to avoid future euro-crises and guarantee the stability of the euro. So far, however, it has proved politically impossible, as EU countries are unwilling to give up their sovereignty on fiscal policy. This article develops a bargaining model that sheds light on how fiscal pooling could become politically acceptable. The model differentiates between the ‘South’ (net beneficiaries) and the ‘North’ (net payers). We find that fiscal pooling should be done via a combination of the fiscal instruments with the highest fiscal multipliers. Instead of a single Fiscal Union, we therefore propose a combination of fiscal pooling instruments which, together, add up to the sufficient level of fiscal integration.