The Breakup of the Euro Area
AbstractThe possibility that the euro area might break up was being raised even before the single currency existed. These scenarios were then lent new life five or six years on, when appreciation of the euro and problems of slow growth in various member states led politicians to blame the European Central Bank for disappointing economic performance. Highly-placed European officials reportedly discussed the possibility that one or more participants might withdraw from the monetary union. How seriously should we take these scenarios? And how significant would be the economic and political consequences? It is unlikely, I argue here, that one or more members of the euro area will leave in the next ten years; total disintegration of the euro area is even more unlikely. While other authors have minimized the technical difficulties of reintroducing a national currency, I suggest that those technical difficulties would be quite formidable. Nor is it certain that the economic problems of the participating member states would be significantly ameliorated by abandoning the euro. And even if there are immediate economic benefits, there would be longer-term political costs.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13393.
Date of creation: Sep 2007
Date of revision:
Publication status: published as Barry Eichengreen. "The Breakup of the Euro Area," in Alberto Alesina and Francesco Giavazzi, editors, "Europe and the Euro" University of Chicago Press (2010)
Note: DAE IFM POL
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Other versions of this item:
- F15 - International Economics - - Trade - - - Economic Integration
- F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-09-16 (All new papers)
- NEP-CBA-2007-09-16 (Central Banking)
- NEP-EEC-2007-09-16 (European Economics)
- NEP-MON-2007-09-16 (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.:
- Mongelli, Francesco Paolo & Vega, Juan Luis, 2006. "What effects is EMU having on the euro area and its member countries? An overview," Working Paper Series 0599, European Central Bank.
- Eduardo Levy Yeyati, 2006.
"Financial dollarization: evaluating the consequences,"
CEPR & CES & MSH, vol. 21(45), pages 61-118, 01.
- Eduardo Levy-Yeyati, 2004. "FINANCIAL DOLLARIZATION: Evaluating the consequences," Econometric Society 2004 Latin American Meetings 184, Econometric Society.
- Eduardo Levy Yeyati, 2005. "Financial Dollarisation: Evaluating The Consequences," Business School Working Papers findollarisation, Universidad Torcuato Di Tella.
- Sachs, Jeffrey & Sala-i-Martin, Xavier, 1992.
"Fiscal Federalism and Optimum Currency Areas: Evidence for Europe from the United States,"
CEPR Discussion Papers
632, C.E.P.R. Discussion Papers.
- Xavier Sala-i-Martin & Jeffrey Sachs, 1991. "Fiscal Federalism and Optimum Currency Areas: Evidence for Europe From the United States," NBER Working Papers 3855, National Bureau of Economic Research, Inc.
- Herschel I. Grossman & John B. Van Huyck, 1989.
"Sovereign Debt as a Contingent Claim: Excusable Default, Repudiation, and Reputation,"
NBER Working Papers
1673, National Bureau of Economic Research, Inc.
- Grossman, Herschel I & Van Huyck, John B, 1988. "Sovereign Debt as a Contingent Claim: Excusable Default, Repudiation, and Reputation," American Economic Review, American Economic Association, vol. 78(5), pages 1088-97, December.
- Rodrik, Dani, 2002.
CEPR Discussion Papers
3524, C.E.P.R. Discussion Papers.
- Wacziarg, Romain & Alesina, Alberto, 1998.
"Openness, Country Size and Government,"
4553014, Harvard University Department of Economics.
- C. Monica Capra & Charles A. Holt, 1999. "Coordination," Southern Economic Journal, Southern Economic Association, vol. 65(3), pages 630-636, January.
- Lars Jonung & Cristina Conflitti, 2008. "Is the euro advantageous? Does it foster European feelings? Europeans on the euro after five years," European Economy - Economic Papers 313, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
- Hallerberg, Mark & Wolff, Guntram B., 2006. "Fiscal institutions, fiscal policy and sovereign risk premia," Discussion Paper Series 1: Economic Studies 2006,35, Deutsche Bundesbank, Research Centre.
- Paul De Grauwe, 2006. "On monetary and political union," CESifo Forum, Ifo Institute for Economic Research at the University of Munich, vol. 7(4), pages 3-10, December.
- Inman, Robert P. & Rubinfeld, Daniel L., 1992. "Fiscal federalism in Europe : Lessons from the United States experience," European Economic Review, Elsevier, vol. 36(2-3), pages 654-660, April.
- Fidrmuc, J. & Horváth, J., 1998.
"Stability of Monetary Unions: Lessons from the Break-Up of Czechoslovakia,"
1998-74, Tilburg University, Center for Economic Research.
- Fidrmuc, Jan & Horvath, Julius & Fidrmuc, Jarko, 1999. "Stability of Monetary Unions: Lessons from the Break-up of Czechoslovakia," Transition Economics Series 10, Institute for Advanced Studies.
- Fidrmuc, Jan & Horvath, Julius & Fidrmuc, Jarko, 1999. "Stability of monetary unions: Lessons from the break-up of Czechoslovakia," ZEI Working Papers B 17-1999, ZEI - Center for European Integration Studies, University of Bonn.
- Alberto Alesina & Vittorio Grilli, 1993. "On The Feasibility Of A One-Speed Or Multispeed European Monetary Union," Economics and Politics, Wiley Blackwell, vol. 5(2), pages 145-165, 07.
- Jakob de Haan & Sylvester C.W. Eijffinger, 2000. "The Democratic Accountability of the European Central Bank: A Comment on Two Fairy-tales," Journal of Common Market Studies, Wiley Blackwell, vol. 38(3), pages 393-407, 09.
- W.H. Buiter, 1999.
"Alice in Euroland,"
CEP Discussion Papers
dp0423, Centre for Economic Performance, LSE.
- Larch, Martin & Jonung, Lars & Fischer, Jonas, 2008.
"101 proposals to reform the Stability and Growth Pact. Why so many? A survey,"
20592, University Library of Munich, Germany.
- Jonas Fischer & Lars Jonung & Martin Larch, 2007. "101 Proposals to reform the Stability and Growth Pact. Why so many? A Survey," European Economy - Economic Papers 267, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
- Buiter, Willem H & Sibert, Anne, 2005. "How the Eurosystem’s Treatment of Collateral in its Open Market Operations Weakens Fiscal Discipline in the Eurozone (and what to do about it)," CEPR Discussion Papers 5387, C.E.P.R. Discussion Papers.
- Eduardo Levy Yeyati & Alain Ize, 2005.
"Financial De-Dollarization: Is It for Real?,"
IMF Working Papers
05/187, International Monetary Fund.
- repec:fth:eeccco:96 is not listed on IDEAS
- Ian Lienert, 2005. "Who Controls the Budget: The Legislature or the Executive?," IMF Working Papers 05/115, International Monetary Fund.
- Eichengreen, Barry, 2003. "Institutions for Fiscal Stability," Institute of European Studies, Working Paper Series qt34p6v7pt, Institute of European Studies, UC Berkeley.
- Scott, Hal S, 1998. "When the Euro Falls Apart," International Finance, Wiley Blackwell, vol. 1(2), pages 207-28, December.
- Peter M. Garber, 1998. "Notes on the Role of TARGET in a Stage III Crisis," NBER Working Papers 6619, National Bureau of Economic Research, Inc.
- Dirk Meyer, 2012. "Ein Fahrplan zum Euroaustritt – technische Vorbereitung und Durchführung im Austrittsland," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 65(06), pages 22-27, 03.
- Eichler, Stefan & Hielscher, Kai, 2012. "Does the ECB act as a lender of last resort during the subprime lending crisis?: Evidence from monetary policy reaction models," Journal of International Money and Finance, Elsevier, vol. 31(3), pages 552-568.
- Valiante, Diego, 2011. "The Eurozone Debt Crisis: From its origins to a way forward," CEPS Papers 5985, Centre for European Policy Studies.
- Malliaris, A.G. & Malliaris, Mary, 2011.
"Are oil, gold and the euro inter-related? time series and neural network analysis,"
35266, University Library of Munich, Germany.
- A. Malliaris & Mary Malliaris, 2013. "Are oil, gold and the euro inter-related? Time series and neural network analysis," Review of Quantitative Finance and Accounting, Springer, vol. 40(1), pages 1-14, January.
- Eric Dor, 2011. "Leaving the euro zone: a user’s guide," Working Papers 2011-ECO-06, IESEG School of Management.
- Elias Papaioannou & Richard Portes, 2008. "The international role of the euro: a status report," European Economy - Economic Papers 317, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
- Eichler, Stefan, 2012. "Financial crisis risk, ECB “non-standard” measures, and the external value of the euro," The Quarterly Review of Economics and Finance, Elsevier, vol. 52(3), pages 257-265.
- Yamamoto, Shugo, 2013. "Sudden stop and trade balance reversal after Asian crisis: Investment drought impact versus exchange rate depreciation," Journal of Policy Modeling, Elsevier, vol. 35(5), pages 750-765.
- Peter Burgold, 2013. "Nominale Abwertung innerhalb einer Währungsunion," Global Financial Markets Working Paper Series 47-2013, Friedrich-Schiller-University Jena.
- Anke Mönnig, 2012. "Balancing the European Monetary Union - an Impact Analysis on the Return of National Currencies," GWS Discussion Paper Series 12-8, GWS - Institute of Economic Structures Research.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.