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A Comprehensive Approach to the Euro-Area Debt Crisis


  • Zsolt Darvas
  • Jean Pisani-Ferry
  • André Sapir


The euro area’s sovereign debt crisis continues though significant steps have been taken to resolve it. This paper proposes a comprehensive solution to the crisis based on three pillars: a plan to restore banking sector soundness in the whole euro area, a resolution of sovereign debt crisis - including a revision of EU assistance facilities and a reduction of the Greek public debt - and a strategy to foster growth and competitiveness. The paper provides novel estimates and analysis focusing on the current situation of Greece, Ireland, Portugal and Spain.

Suggested Citation

  • Zsolt Darvas & Jean Pisani-Ferry & André Sapir, 2011. "A Comprehensive Approach to the Euro-Area Debt Crisis," Working Papers 1101, Department of Mathematical Economics and Economic Analysis, Corvinus University of Budapest.
  • Handle: RePEc:mkg:wpaper:1101

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    References listed on IDEAS

    1. Geert Bekaert, 2001. "Expectations Hypotheses Tests," Journal of Finance, American Finance Association, vol. 56(4), pages 1357-1394, August.
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    Cited by:

    1. Jean Pisani-Ferry & André Sapir & Guntram B. Wolff, . "EU-IMF assistance to euro area countries: an early assessment," Blueprints, Bruegel, number 779, November.
    2. Bitros, George C. & Batavia, Bala & Nandakumar, Parameswar, 2016. "Economic crisis in the European periphery: An assessment of EMU membership and home policy effects based on the Greek experience," The North American Journal of Economics and Finance, Elsevier, vol. 36(C), pages 312-327.
    3. Judit Karsai, 2012. "Development of the Hungarian Venture Capital and Private Equity Industry over the Past Two Decades," IEHAS Discussion Papers 1201, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
    4. Zsombor Z. Méder & András Simonovits & János Vinczeb, 2012. "Tax Morale and Tax Evasion: Social Preferences and Bounded Rationality," Economic Analysis and Policy, Elsevier, vol. 42(2), pages 171-188, September.
    5. repec:ulp:buopee:v::y:2011:m:06:i:4 is not listed on IDEAS
    6. Xavier Richet, 2012. "Impact and Response to the Financial Crisis: Comparing the EU and China Policies," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 3-15.
    7. Wilhelm Kohler, 2012. "The Eurosystem in Times of Crises: Greece in the Role of a Reserve Currency Country?," CESifo Forum, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 13(SPECIALIS), pages 14-22, February.
    8. Arghyrou, Michael G. & Gadea, Maria Dolores, 2012. "The single monetary policy and domestic macro-fundamentals: Evidence from Spain," Journal of Policy Modeling, Elsevier, vol. 34(1), pages 16-34.
    9. Schilirò, Daniele, 2011. "A new governance for the EMU and the economic policy framework," MPRA Paper 32235, University Library of Munich, Germany, revised Jul 2011.
    10. Batavia, Bala & Nandakumar, Parameswar, 2016. "Did EMU membership cause the “Dutch disease” in the PIGS nations?," Global Finance Journal, Elsevier, vol. 31(C), pages 31-41.
    11. Zsolt Darvas & Jean Pisani-Ferry, 2011. "Europe's Growth Emergency," IEHAS Discussion Papers 1144, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
    12. Gilbert Koenig, 2011. "L’euro, handicap ou atout en cas de crise grave ?," Bulletin de l'Observatoire des politiques économiques en Europe, Observatoire des Politiques Économiques en Europe (OPEE), vol. 24(1), pages 11-16, June.
    13. Carlo Panico & Francesco Purificato, 2012. "The Role of Institutional and Political Factors in the European Debt Crisis," Working Papers wp280, Political Economy Research Institute, University of Massachusetts at Amherst.
    14. Gustav A. Horn & Fabian Lindner & Torsten Niechoj, 2011. "Schuldenschnitt für Griechenland - ein gefährlicher Irrweg für den Euroraum," IMK Report 63-2011, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    15. Daniel Daianu, 2012. "Euro Zone Crisis and EU Governance: Tackling a Flawed Design and Inadequate Policy Arrangements," CASE Network Studies and Analyses 433, CASE-Center for Social and Economic Research.
    16. 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.
    17. Zsolt Darvas, 2012. "The euro crisis: ten roots, but fewer solutions," Policy Contributions 755, Bruegel.
    18. Schilirò, Daniele, 2012. "A new governance for EMU and the economic policy framework," MPRA Paper 47454, University Library of Munich, Germany.
    19. Pedro Bação & António Portugal Durate & Mariana Simões, 2013. "The International Monetary System in Flux: Overview and Prospects," GEMF Working Papers 2013-07, GEMF, Faculty of Economics, University of Coimbra.
    20. repec:ces:ifodic:v:9:y:2011:i:3:p:03-09 is not listed on IDEAS
    21. William R. Cline, 2011. "Sustainability of Greek Public Debt," Policy Briefs PB11-15, Peterson Institute for International Economics.
    22. Aleksandra Iwulska & Naotaka Sugawara & Juan Zalduendo, 2012. "Financial Integration in Emerging Europe: an Enviable Development Opportunity with Tail Risks," CASE Network Studies and Analyses 438, CASE-Center for Social and Economic Research.
    23. Schilirò, Daniele, 2012. "The crisis of euro’s governance: institutional aspects and policy issues," MPRA Paper 40861, University Library of Munich, Germany.
    24. Jürgen von Hagen, 2011. "The Sustainability of Public Finances in the EMU," CESifo DICE Report, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 9(3), pages 03-10, October.
    25. repec:ces:ifodic:v:9:y:2011:i:3:p:16751944 is not listed on IDEAS

    More about this item


    fiscal sustainability; euro-area crisis; financial interdependence;

    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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