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Avoiding a new European divide


  • Zsolt Darvas
  • Jean Pisani-Ferry


The financial crisis, which is now hitting the new member states severely, highlights the shortcomings of the existing institutional architecture in Europe. Current strains reflect a revaluation of risks but they also result from policy mistakes. In this policy brief, Zsolt Darvas and Jean Pisani-Ferry show that some of the non euro-area new member states suffer from serious vulnerabilities, to which policy has been slow to respond. They believe that the crisis management in the euro area has had the unintended consequence of putting non euro-area new member states at disadvantage. These are unhealthy developments and without decisive action, a new political and economic divide within Europe may emerge.

Suggested Citation

  • Zsolt Darvas & Jean Pisani-Ferry, 2008. "Avoiding a new European divide," Policy Briefs 227, Bruegel.
  • Handle: RePEc:bre:polbrf:227

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    References listed on IDEAS

    1. Saiz, Albert, 2007. "Immigration and housing rents in American cities," Journal of Urban Economics, Elsevier, vol. 61(2), pages 345-371, March.
    2. Paul van den Noord, 2005. "Tax Incentives and House Price Volatility in the Euro Area: Theory and Evidence," Economie Internationale, CEPII research center, issue 101, pages 29-45.
    3. Alan Ahearne & Brigit Schmitz & Jürgen von Hagen, 2007. "Current Account Imbalances in the Euro Area (draft version)," CASE Network Studies and Analyses 0345, CASE-Center for Social and Economic Research.
    4. Simonetta Longhi & Peter Nijkamp & Jacques Poot, 2005. "A Meta-Analytic Assessment of the Effect of Immigration on Wages," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 451-477, July.
    5. Gianmarco I. P. Ottaviano & Giovanni Peri, 2016. "Rethinking The Effect Of Immigration On Wages," World Scientific Book Chapters,in: The Economics of International Migration, chapter 2, pages 35-80 World Scientific Publishing Co. Pte. Ltd..
    6. Miller, Marcus & Sutherland, Alan, 1991. "The "Walters Critique" of the EMS--A Case of Inconsistent Expectations?," The Manchester School of Economic & Social Studies, University of Manchester, vol. 59(0), pages 23-37, Supplemen.
    7. Kirsanova, Tatiana & Vines, David & Wren-Lewis, Simon, 2006. "Fiscal Policy and Macroeconomic Stability Within a Currency Union," CEPR Discussion Papers 5584, C.E.P.R. Discussion Papers.
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    Cited by:

    1. Zsolt Darvas, 2010. "The case for reforming euro area entry criteria," Society and Economy, Akadémiai Kiadó, Hungary, vol. 32(2), pages 195-219, December.
    2. Anders Aslund, 2009. "The East European Financial Crisis," CASE Network Studies and Analyses 0395, CASE-Center for Social and Economic Research.
    3. Pop, Napoleon & Lupu, Iulia & Milea, Camelia & Iordache, Floarea & Mosneanu, Elena Ana & Ionascu, Silviu & Criste, Adina & Glod, Alina Georgeta, 2010. "Trends In The New Eu Member States Macroeconomic Policies To Adopt The Euro. Performance Of The Romanian Macroeconomic Policies To Adopt The Euro," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 14(1), pages 123-140.
    4. Dabrowski, Marek, 2010. "The global financial crisis: Lessons for European integration," Economic Systems, Elsevier, vol. 34(1), pages 38-54, March.
    5. Zsolt Darvas, 2009. "The Baltic Challenge and Euro-Area Entry," Policy Contributions 357, Bruegel.

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