IDEAS home Printed from https://ideas.repec.org/a/rce/rvceco/35688.html

Mutualizing Euro Area debt without a Fiscal Union

Author

Listed:
  • Krause Montalbert, Stefan

Abstract

Several years have passed since the onset of the most recent financial crisis, and Europe is still not “off the hook.” A twin crisis emerged: the sovereign debt crisis. The main objective of this paper is to design a mechanism for pooling Euro Area debt together, in order to lower short-term interest rates, and limit the risk of contagion. This design, which draws from existing proposals for jointly issued bonds in the Euro Area, contains features that would make it acceptable for participants (such as no ex-ante fiscal transfers across countries, and widespread benefits from lower debt-service payments), while placing a reasonable cap on potential losses from default by other participants through limited liability.

Suggested Citation

  • Krause Montalbert, Stefan, 2018. "Mutualizing Euro Area debt without a Fiscal Union," Revista de Ciencias Económicas, Instituto de Investigaciones en Ciencias Económicas, Universidad de Costa Rica, vol. 36(2), December.
    • Handle: RePEc:rce:rvceco:35688
    as

    Download full text from publisher

    File URL: https://revistas.ucr.ac.cr/index.php/economicas/article/view/35688
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Daniel Brou & Michele Ruta, 2011. "Economic Integration, Political Integration Or Both?," Journal of the European Economic Association, European Economic Association, vol. 9(6), pages 1143-1167, December.
    2. Michael Ehrmann & Marcel Fratzscher, 2015. "Euro Area Government Bonds: Integration and Fragmentation during the Sovereign Debt Crisis," Discussion Papers of DIW Berlin 1479, DIW Berlin, German Institute for Economic Research.
    3. Jacques Delpla & Jakob von Weizsäcker, 2010. "The Blue Bond Proposal," Bruegel Policy Brief 403, Bruegel.
    Full references (including those not matched with items on IDEAS)

    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. repec:pra:mprapa:42873 is not listed on IDEAS
    2. Gaeta, Davide & Begalli, Diego & Corsinovi, Paola, 2012. "The alignment of European Law in pre-candidate countries: the case of Bosnia and Herzegovina wine law," 126th Seminar, June 27-29, 2012, Capri, Italy 126100, European Association of Agricultural Economists.
    3. Martin Watts & Timothy Sharpe & James Juniper, 2014. "Reformation or exodus: Assessing the future of the Euro," The Economic and Labour Relations Review, , vol. 25(3), pages 465-483, September.
    4. Bruszt, Laszlo & Campos, Nauro F., 2018. "Economic Integration and State Capacity: Evidence from the Eastern Enlargement of the European Union," IZA Discussion Papers 11782, Institute of Labor Economics (IZA).
    5. Corsetti, Giancarlo & Dedola, Luca & Jarociński, Marek & Maćkowiak, Bartosz & Schmidt, Sebastian, 2019. "Macroeconomic stabilization, monetary-fiscal interactions, and Europe's monetary union," European Journal of Political Economy, Elsevier, vol. 57(C), pages 22-33.
    6. Ronny Mazzocchi & Roberto Tamborini, 2019. "Current Account Imbalances and the Euro Area: Alternative Views," EconPol Working Paper 27, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    7. Sebastian Blesse & Pierre C Boyer & Friedrich Heinemann & Eckhard Janeba & Anasuya Raj, 2019. "European Monetary Union reform preferences of French and German parliamentarians," European Union Politics, , vol. 20(3), pages 406-424, September.
    8. Arampatzi, Alexia-Styliani & Christie, Rebecca & Evrard, Johanne & Parisi, Laura & Rouveyrol, Clément & van Overbeek, Fons, 2025. "Capital markets union: a deep dive - Five measures to foster a single market for capital," Occasional Paper Series 369, European Central Bank.
    9. Markus K. Brunnermeier & Sam Langfield & Marco Pagano & Ricardo Reis & Stijn Van Nieuwerburgh & Dimitri Vayanos, 2017. "ESBies: safety in the tranches," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 32(90), pages 175-219.
    10. Daniel Dăianu, 2012. "EURO zone crisis and EU governance: Tackling a flawed design and inadequate policy arrangements," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 62(3), pages 295-319, September.
    11. repec:dau:papers:123456789/12010 is not listed on IDEAS
    12. Spyros Alogoskoufis & Sam Langfield, 2020. "Regulating the Doom Loop," International Journal of Central Banking, International Journal of Central Banking, vol. 16(4), pages 251-292, September.
    13. Evgenii Smirnov & Sergey Lukyanov, 2019. "Development of the Global Market of Artificial Intelligence Systems," Economy of region, Centre for Economic Security, Institute of Economics of Ural Branch of Russian Academy of Sciences, vol. 1(1), pages 57-69.
    14. Fabrizio Balassone & Sara Cecchetti & Martina Cecioni & Marika Cioffi & Wanda Cornacchia & Flavia Corneli & Gabriele Semeraro, 2018. "Economic governance in the euro area: balancing risk reduction and risk sharing," Chapters, in: Giuseppe Eusepi & Richard E. Wagner (ed.), Debt Default and Democracy, chapter 7, pages 124-154, Edward Elgar Publishing.
    15. Kämmerer Jörn Axel, 2016. "How Can Eurobonds Be Legally Implemented into European Law?," Review of Law & Economics, De Gruyter, vol. 12(3), pages 585-604, November.
    16. Frankel, Jeffrey, 2015. "The euro crisis: Where to from here?," Journal of Policy Modeling, Elsevier, vol. 37(3), pages 428-444.
    17. William Mitchell, 2015. "Eurozone Dystopia," Books, Edward Elgar Publishing, number 16478, August.
    18. repec:spo:wpmain:info:hdl:2441/4qcei72ijt9qco0d0fp1ak47b7 is not listed on IDEAS
    19. repec:spo:wpmain:info:hdl:2441/4ppcskgnsc8tmbhdrupis355j7 is not listed on IDEAS
    20. Francesco Saraceno & Roberto Tamborini, 2015. "How can it work? On the impact of quantitative easing in the Eurozone," DEM Working Papers 2015/03, Department of Economics and Management.
    21. Tyrole, J., 2012. "The euro crisis: some reflexions on institutional reform," Financial Stability Review, Banque de France, issue 16, pages 225-242, April.
    22. Massimo Amato & Everardo Belloni & Paolo Falbo & Lucio Gobbi, 2021. "Europe, public debts, and safe assets: the scope for a European Debt Agency," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 38(3), pages 823-861, October.
    23. Matteo Salto & Stefano Zedda & Stefan Zeugner, 2020. "Using Supra-Covered Bonds to Enhance Liquidity in the Euro Area: Assessment of Advantages for the Banking Sector," JRFM, MDPI, vol. 13(12), pages 1-10, November.
    24. Nauro Campos & Fabrizio Coricelli & Luigi Moretti, 2015. "Norwegian Rhapsody? The Political Economy Benefits of Regional Integration," Working Papers halshs-01267252, HAL.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • A - General Economics and Teaching

    Statistics

    Access and download statistics

    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:rce:rvceco:35688. 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: Luis J. Hall (email available below). General contact details of provider: https://edirc.repec.org/data/iiucrcr.html .

    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.