IDEAS home Printed from https://ideas.repec.org/a/ejn/ejefjr/v2y2014i3p45-56.html
   My bibliography  Save this article

Eurozone’s Future: Convergence, Restructuring or “Muddling Through”?

Author

Listed:
  • Antonin Rusek

    (Susquehanna University, USA)

Abstract

The mixture of the recent EU policies – mainly the “fiscal compact” and the OMT approach by the ECB – restored the nominal stability for the Eurozone and therefore preserved the common currency. However, the same steps resulted in a widening gap between the Northern tier and the Mediterranean countries – the real divergence. To address this issue – which is potentially a mortal threat to the Eurozone in its present configuration – the three policy options are available: A restoration of a real convergence, the Eurozone?s restructuring or a “muddling through”. The first two require radical policy steps which in the present political and economic climate are very unlikely. That leaves “muddling through” as the likeliest future approach. However, its inherent ad hoc nature breeds uncertainty, which, combined with a complacency stemming from the recent “successes” increases the possibility of a destructive future dynamics. Keywords: EU North – South Divergence, Nominal Convergence vs. Real Divergence

Suggested Citation

  • Antonin Rusek, 2014. "Eurozone’s Future: Convergence, Restructuring or “Muddling Through”?," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 2(3), pages 45-56.
    • Handle: RePEc:ejn:ejefjr:v:2:y:2014:i:3:p:45-56
    as

    Download full text from publisher

    File URL: https://eurasianpublications.com/wp-content/uploads/2021/02/EJEF-2.3.3.-Antonin-Rusek-pp.45-56.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Stracca, Livio, 2013. "The global effects of the euro debt crisis," Working Paper Series 1573, European Central Bank.
    2. Alexandr Hobza & Stefan Zeugner, 2014. "The "imbalanced balance" and its unravelling: current accounts and bilateral financial flows in the euro area," European Economy - Economic Papers 2008 - 2015 520, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    3. Ms. Ruo Chen & Mr. Gian M Milesi-Ferretti & Mr. Thierry Tressel, 2012. "External Imbalances in the Euro Area," IMF Working Papers 2012/236, International Monetary Fund.
    4. Hobza, Alexandr & Zeugner, Stefan, 2014. "Current accounts and financial flows in the euro area," Journal of International Money and Finance, Elsevier, vol. 48(PB), pages 291-313.
    5. Obstfeld, Maurice, 2013. "Finance at Center Stage: Some Lessons of the Euro Crisis," CEPR Discussion Papers 9415, C.E.P.R. Discussion Papers.
    6. Anke Hassel, 2014. "Adjustments in the Eurozone: Varieties of Capitalism and the Crisis in Southern Europe," LEQS – LSE 'Europe in Question' Discussion Paper Series 76, European Institute, LSE.
    7. Maria Jepsen & Philippe Pochet & Christophe Degryse, 2013. "The Euro crisis and its impact on national and European social policies," Working Papers 8595, European Trade Union Institute (ETUI).
    8. Anke Hassel, 2014. "Adjustments in the Eurozone: Varieties of Capitalism and the Crisis in Southern Europe," Europe in Question Discussion Paper Series of the London School of Economics (LEQs) 6, London School of Economics / European Institute.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nihal Bayraktar & Blanca Moreno-Dodson, 2018. "Public Expenditures And Growth In A Monetary Union: The Case Of Waemu," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 6(1), pages 107-132.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gadatsch, Niklas & Stähler, Nikolai & Weigert, Benjamin, 2016. "German labor market and fiscal reforms 1999–2008: Can they be blamed for intra-euro area imbalances?," Journal of Macroeconomics, Elsevier, vol. 50(C), pages 307-324.
    2. Mirdala, Rajmund, 2015. "Real Exchange Rates, Current Accounts and Competitiveness Issues in the Euro Area," MPRA Paper 68864, University Library of Munich, Germany.
    3. Timo Bettendorf & Miguel A. León‐Ledesma, 2019. "German Wage Moderation and European Imbalances: Feeding the Global VAR with Theory," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 51(2-3), pages 617-653, March.
    4. Ruppert, Kilian & Stähler, Nikolai, 2020. "Household savings, capital investments and public policies: What drives the German current account?," Discussion Papers 41/2020, Deutsche Bundesbank.
    5. Ruppert, Kilian & Stähler, Nikolai, 2022. "What drives the German current account? Household savings, capital investments and public policies," Economic Modelling, Elsevier, vol. 108(C).
    6. António Afonso & Jorge Silva, 2017. "Current account balance cyclicality," Applied Economics Letters, Taylor & Francis Journals, vol. 24(13), pages 911-917, July.
    7. Reto Bürgisser & Donato Di Carlo, 2023. "Blessing or Curse? The Rise of Tourism‐Led Growth in Europe's Southern Periphery," Journal of Common Market Studies, Wiley Blackwell, vol. 61(1), pages 236-258, January.
    8. Marta Silva & João Carlos Lopes, 2020. "The structural adjustment of the Portuguese economy in the context of the economic reform of the Eurozone," Working Papers REM 2020/0143, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    9. Jakub Borowski & Adam Czerniak & Beáta Farkas, 2023. "Diverse Models of Capitalism and Synchronization of Business Cycles," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 65(4), pages 681-712, December.
    10. Denise Currie & Paul Teague, 2017. "The eurozone crisis, German hegemony and labour market reform in the GIPS countries," Industrial Relations Journal, Wiley Blackwell, vol. 48(2), pages 154-173, March.
    11. Galina Hale & Maurice Obstfeld, 2016. "The Euro And The Geography Of International Debt Flows," Journal of the European Economic Association, European Economic Association, vol. 14(1), pages 115-144, February.
    12. Filippo Balestrieri & Mr. Suman S Basu, 2018. "An Imperfect Financial Union With Heterogeneous Regions," IMF Working Papers 2018/205, International Monetary Fund.
    13. Thomas Prosser, 2017. "Explaining Implementation through Varieties of Capitalism Theory: The Case of the Telework and Work-related Stress Agreements," Journal of Common Market Studies, Wiley Blackwell, vol. 55(4), pages 889-908, July.
    14. Philip R. Lane, 2013. "Growth And Adjustment Challenges For The Euro Area," The Economic and Social Review, Economic and Social Studies, vol. 44(2), pages 273-295.
    15. Robert Kollmann & Marco Ratto & Werner Roeger & Jan in't Veld & Lukas Vogel, 2015. "What drives the German current account? And how does it affect other EU Member States?," Economic Policy, CEPR;CES;MSH, vol. 30(81), pages 47-93.
    16. Ricardo Reis, 2013. "The Portugese Slump and Crash and the Euro Crisis," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 44(1 (Spring), pages 143-210.
    17. Kapeller, Jakob & Gräbner, Claudius & Heimberger, Philipp, 2019. "Economic polarisation in Europe: Causes and policy options," ifso working paper series 5, University of Duisburg-Essen, Institute for Socioeconomics (ifso).
    18. Schilirò, Daniele, 2016. "Rules, Imbalances and Growth in the Eurozone," MPRA Paper 75641, University Library of Munich, Germany.
    19. DIMITRIOU Georgia & METAXAS Theodore, 2018. "Mapping Economic Crisis In South Europe: Greece, Portugal And Cyprus," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 18(2), pages 41-54.
    20. Krahé, Max, 2023. "Italiens Stagnation verstehen," Papers 277907, Dezernat Zukunft - Institute for Macrofinance, Berlin.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ejn:ejefjr:v:2:y:2014:i:3:p:45-56. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Esra Barakli (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.