If Europe Dared to Write Down Debt

Martin Sandbu

in Europe's Orphan

Published by Princeton University Press

Published in print March 2017 | ISBN: 9780691175942
Published online May 2018 | e-ISBN: 9781400885510
If Europe Dared to Write Down Debt

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This chapter offers an alternative history in which the eurozone did the right thing from the beginning. As a denunciation of past mistakes and an admonition for future policy, it shows that restructurings could have been managed in ways that were as orderly as the bail-outs that actually took place, if not more so, and with much greater fairness. Europe's economic well-being and political health would have been vastly better as a result. Two things would have been very different. First, the custodians of the single currency would not have been faced with temptations to put the euro's integrity in doubt. Second, greater national autonomy would have encouraged better collective solutions — both because the negotiations over what those solutions should be would have been more balanced, and because the greater room for policy manoeuvre by national governments would have produced a wider range of policy proposals.

Keywords: eurozone; restructuring; single currency; euro; national autonomy; national governments; policy

Chapter.  8832 words. 

Subjects: Political Economy

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