Finance: Research, Policy and Anecdotes

Making the Eurozone more resilient

Just in time after the Brexit vote and before the ECB's Sintra meetings next week a group of leading European economists has published a call for reforms on VoxEU. While there is wide recognition that enormous progress has been made in making the Eurozone stronger, a lot is still missing to make the Eurozone truly resilient against shocks.  And as we saw on Friday, such shocks can come at any point in time.   But what reforms are neceesary?  What is urgent?  What can wait (for political consensus)?

This column (of which yours truly is one of many authors) is intentionally kept on a general level.  While economists across Europe and across different subdisciplines often disagree on specific policy suggestions and proposals, most of us agree on the broad themes: make the financial system more resilient and mitigate the repercussions of bank failures; reduce the risk of sovereign default and reduce the impact of such default if it happens; and undertake the necessary structural reforms to make the Eurozone grow again.  Most importantly, we call for more clarity in institutional responsibilities across the policy architecture of the Eurozone and reduce the burden on the ECB. 

This call for reforms follows on an earlier consensus narrative on the causes of the Eurozone crisis, which included many of the same authors.   Agreeing on the causes allows us to follow up with policy recommendations.