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The Euro Area Crisis Management Framework – Consequences and Institutional Follow-ups

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  • Belke, Ansgar

Abstract

The current instruments in the EU to deal with debt and liquidity crises include among others the European Financial Stability Facility (EFSF) and the European Financial Stabilisation Mechanism (EFSM). Both are temporary in nature (3 years). In terms of an efficient future crisis management framework one has to ask what follows after the EFSF and the EFSM expire in 3 years time. In this vein, this briefing paper addresses the question of the political and economic medium- to long-term consequences of the recent decisions. Moreover, we assess what needs to be done using this window of opportunity of the coming 3 years. Which institutions need to be formalized, into what format, in order to achieve a coherent whole structure? This briefing paper presents and evaluates alternatives as regards the on-going debate on establishing permanent instruments to support the stability of the euro. Among them are the enhancement of the effectiveness of the Stability and Growth Pact combined with the introduction of a 'European semester' and a macroeconomic surveillance and crisis mechanism, fiscal limits hard-coded into each country's legislation in the form of automatic, binding and unchangeable rules and, as the preferred solution, the European Monetary Fund.

Suggested Citation

  • Belke, Ansgar, 2010. "The Euro Area Crisis Management Framework – Consequences and Institutional Follow-ups," Ruhr Economic Papers 207, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
  • Handle: RePEc:zbw:rwirep:207
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    References listed on IDEAS

    as
    1. von Hagen, Jürgen & Schuknecht, Ludger & Wolswijk, Guido, 2011. "Government bond risk premiums in the EU revisited: The impact of the financial crisis," European Journal of Political Economy, Elsevier, vol. 27(1), pages 36-43, March.
    2. Burda, Michael & Wyplosz, Charles, 2017. "Macroeconomics: a European Text," OUP Catalogue, Oxford University Press, edition 7, number 9780198737513.
    3. Holger Zemanek & Ansgar Belke & Gunther Schnabl, 2010. "Current account balances and structural adjustment in the euro area," International Economics and Economic Policy, Springer, vol. 7(1), pages 83-127, May.
    4. Ansgar Belke, 2010. "Driven by the markets? ECB sovereign bond purchases and the securities markets programme," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 45(6), pages 357-363, November.
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    Cited by:

    1. Belke, Ansgar, 2010. "Reinforcing EU Governance in Times of Crisis: The Commission Proposals and Beyond," Ruhr Economic Papers 232, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    2. Cristina Balgar, 2014. "What Lies Ahead of Germany’s Leadership Role in Europe," Global Economic Observer, "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences;Institute for World Economy of the Romanian Academy, vol. 2(1), pages 65-75, May.
    3. Christian Kirchner & Ansgar Belke & Christoph Degenhart & Joachim Wieland, 2011. "Debt crisis of the euro periphery countries: How should debt restructuring be designed?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 64(11), pages 03-16, June.
    4. repec:zbw:rwirep:0232 is not listed on IDEAS
    5. Ansgar Belke, 2010. "Reinforcing EU Governance in Times of Crisis: The Commission Proposals and Beyond," Ruhr Economic Papers 0232, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.

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    More about this item

    Keywords

    EU governance; European Financial Stability Facility; European Financial Stabilisation Mechanism; European Monetary Fund; policy coordination; Stability and Growth Pact;
    All these keywords.

    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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