Controlled dismantlement of the Eurozone: A proposal for a New European Monetary System and a new role for the European Central Bank
AbstractIn Kawalec and Pytlarczyk (2013), we argue that the single European currency constitutes a serious threat to the European Union and the Single European Market,and we propose a controlled dismantlement of the Eurozone. In this paper, we undertake a deeper analysis of the measures which would minimize the risks throughout the process of the Eurozone dismantlement and contribute to rebuilding confidence in the future of Europe. · The dismantlement should be the result of a consensual decision to replace the euro with an alternative system of currency coordination. · The dismantlement should start with the exit of the most competitive countries. In the meantime, the euro should remain the common currency of less competitive countries. · The European Central Bank (ECB) should be preserved as the central bank for all 17 Eurozone member countries, even after some of those countries have replaced the euro with new currencies. In this capacity, the ECB should be in charge of designing,preparing, and implementing the segmentation of the Eurozone as well as managing the new currency coordination system – European Monetary System 2. · The forthcoming EU – USA free trade agreement would build new momentum for economic growth and contribute to restoring confidence in the future of Europe. As of today, neither the member states of the Eurozone nor European institutions such as the European Commission or the ECB have been able to come up with a game-changing proposal such as the Eurozone dismantlement. However, this may change as a result of adverse economic and political developments. One of the potential triggers could be the situation in France. Classification-JEL: E5, E58, F15, F31, G18
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Bibliographic InfoPaper provided by National Bank of Poland, Economic Institute in its series National Bank of Poland Working Papers with number 155.
Date of creation: 2013
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More information through EDIRC
Eurozone crisis; Euro breakup; European Central Bank; Dismantlement of the Eurozone; currency coordination; European Monetary System 2.;
Find related papers by JEL classification:
- E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
- F15 - International Economics - - Trade - - - Economic Integration
- F31 - International Economics - - International Finance - - - Foreign Exchange
- G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-09-13 (All new papers)
- NEP-CBA-2013-09-13 (Central Banking)
- NEP-EEC-2013-09-13 (European Economics)
- NEP-MAC-2013-09-13 (Macroeconomics)
- NEP-MON-2013-09-13 (Monetary Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hans-Werner Sinn & Timo Wollmershaeuser, 2011.
"Target Loans, Current Account Balances and Capital Flows: The ECB’s Rescue Facility,"
NBER Working Papers
17626, National Bureau of Economic Research, Inc.
- Hans-Werner Sinn & Timo Wollmershäuser, 2012. "Target loans, current account balances and capital flows: the ECB’s rescue facility," International Tax and Public Finance, Springer, vol. 19(4), pages 468-508, August.
- Sinn, Hans-Werner & Wollmershäuser, Timo, 2012. "Target loans, current account balances and capital flows: The ECB’s rescue facility," Munich Reprints in Economics 19556, University of Munich, Department of Economics.
- Hans-Werner Sinn & Timo Wollmershäuser, 2011. "Target Loans, Current Account Balances and Capital Flows: The ECB’s Rescue Facility," CESifo Working Paper Series 3500, CESifo Group Munich.
- Stefan Kawalec & Ernest Pytlarczyk, 2012. "Controlled Dismantlement of the Euro Area in Order to Preserve the European Union and Single European Market," CASE Network Studies and Analyses 441, CASE-Center for Social and Economic Research.
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