Download or read book Strengthening the Euro Area written by Mr.John C Bluedorn and published by International Monetary Fund. This book was released on 2019-06-17 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: Cross-country differences in economic resilience—in an economy’s ability to withstand and adjust to shocks—remain significant in the euro area. In part, the differences reflect the lack of a national nominal exchange rate as a mechanism to adjust to shocks. The IMF staff has argued that union-wide architectural changes such as the banking union, the capital markets union, and a central fiscal capacity can help foster greater international risk sharing. Yet even these changes cannot insure against all shocks. National policies thus have a vital role to play. This IMF staff discussion note analyzes how national structural policies can help euro area countries better deal with economic shocks. Using a mix of empirical and modeling approaches, the note finds that growth-enhancing reforms to labor and product market regulations, tailored to country-specific circumstances, would help individual euro area economies weather adverse shocks. Higher-quality insolvency regimes are associated with more efficient factor reallocation following a shock. The note also finds that structural and cyclical policies interact. Greater rigidities make economies more fragile, putting a higher burden on fiscal policy. This is especially true for members of a monetary union. Countries should build fiscal space in good times and tackle rigidities, reducing their need for countercyclical policies in bad times while making countercyclical policies more effective when deployed.

Download or read book Building a Better Union written by Angana Banerji and published by International Monetary Fund. This book was released on 2015-09-11 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: The momentum for structural reforms is waning in the euro area at a time when even faster progress is needed to boost productivity and growth, achieve real economic convergence, and improve the resilience of the monetary union. What can the European Union (EU) institutions do to bridge this divide? This paper argues for greater simplicity, transparency and accountability in the EU governance framework for structural reforms. Our three interrelated proposals—“outcome-based” benchmarking; better use of existing EU processes to strengthen oversight and reduce discretion; and improved financial incentives—could help advance reforms. Ex post monitoring by an independent EU-level “structural council” and ex ante policy innovation by national productivity councils could strengthen accountability and ownership. Deeper governance reforms should be considered in the medium-term with a view toward a greater EU role in promoting convergence.

Download or read book A Banking Union for the Euro Area written by Rishi Goyal and published by International Monetary Fund. This book was released on 2013-02-12 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: The SDN elaborates the case for, and the design of, a banking union for the euro area. It discusses the benefits and costs of a banking union, presents a steady state view of the banking union, elaborates difficult transition issues, and briefly discusses broader EU issues. As such, it assesses current plans and provides advice. It is accompanied by three background technical notes that analyze in depth the various elements of the banking union: a single supervisory framework; a single resolution and common safety net; and urgent issues related to repair of weak banks in Europe.

Download or read book How to Fix the Euro written by Stephen Pickford and published by Chatham House. This book was released on 2015-01-31 with total page 56 pages. Available in PDF, EPUB and Kindle. Book excerpt: The global economic and financial crisis that started in 2007 exposed serious flaws in the euro's original design. This report examines why Europe's economic and monetary union was so badly affected by the crisis, and assesses whether further changes need to be made to the structure of economic governance that underpins it. A Chatham House, Elcano and AREL Report

Download or read book Repair and Prepare written by Henrik Enderlein and published by . This book was released on 2015 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: This pilot study, coordinated by Henrik Enderlein (Jacques Delors Institut - Berlin) and Joachim Fritz-Vannahme (Bertelsmann Stiftung) and whose rapporteur is Jörg Haas (Jacques Delors Institut - Berlin) explores how Europe can put a definite end to the euro crisis. It proposes a working method that facilitates cooperation and commitment and identifies questions that Europe needs to answer on the road towards a resilient EMU. Although the first wave of the euro area's economic crisis has receded, this is no time for complacency. The European Union remains threatened by low levels of investment, sluggish reforms, persistent tensions between EU members and an erosion of EU legitimacy. We argue that Europe faces two overarching challenges. First, it needs to repair the massive economic and political damages wrought by the crisis, and second, the euro area needs to eradicate its systemic weaknesses and prepare for future shocks. In its current form, EMU is not viable in the long run. The current crisis has pushed it to its limits, and the next one may tear it apart. What Europe needs now is a comprehensive vision of the path from crisis to resilience that can serve as a guide for concrete action. This pilot study contributes to such a vision in two ways: 1. It develops a roadmap towards a sustainable EMU. The idea is to build strong incentives for all euro-area member states (as well as willing EU member states outside the euro area) to implement structural reforms and commit to an enhanced and more integrated monetary union. In recognition that the current political environment will render difficult any long-term reform process lacking immediate benefits, the roadmap is accompanied by a modernisation pact that focuses on smart debt reduction and a coordinated investment initiative. 2. Moreover, the study identifies "known unknowns," thereby providing a clearer view of questions that need to be answered as Europe moves towards a more resilient monetary union. It outlines which areas need to be researched in more detail.

Download or read book Euro Area Policies written by International Monetary Fund. Monetary and Capital Markets Department and published by International Monetary Fund. This book was released on 2018-07-19 with total page 86 pages. Available in PDF, EPUB and Kindle. Book excerpt: Overall the resilience of large euro area banks has improved, but important vulnerabilities remain. Capital buffers are in aggregate sizeable relative to immediate threats, but some banks are especially vulnerable to credit risk and others to market risks, including a substantial rise in risk premia. The banking system as a whole has ample liquidity, against a backdrop of ECB support. At a structural level, low profitability is found in many banks across all business models, despite improving conjunctural conditions. The interconnectedness analysis shows that strong buffers are effective in dampening both vulnerabilities and onward transmission. Risks to financial stability relate mainly to tighter financial conditions, weaker growth, and policy and geopolitical uncertainties. The withdrawal of the United Kingdom from the EU (Brexit) could potentially disrupt financial market and services, and thus the wider economy. Also, policy reversals could hurt debt sustainability and test the cohesion of policy making in the union.

Download or read book Economic Convergence in the Euro Area Coming Together or Drifting Apart written by Mr.Jeffrey R. Franks and published by International Monetary Fund. This book was released on 2018-01-23 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine economic convergence among euro area countries on multiple dimensions. While there was nominal convergence of inflation and interest rates, real convergence of per capita income levels has not occurred among the original euro area members since the advent of the common currency. Income convergence stagnated in the early years of the common currency and has reversed in the wake of the global economic crisis. New euro area members, in contrast, have seen real income convergence. Business cycles became more synchronized, but the amplitude of those cycles diverged. Financial cycles showed a similar pattern: sychronizing more over time, but with divergent amplitudes. Income convergence requires reforms boosting productivity growth in lagging countries, while cyclical and financial convergence can be enhanced by measures to improve national and euro area fiscal policies, together with steps to deepen the single market.

Download or read book Dominant Currencies and External Adjustment written by Gustavo Adler and published by International Monetary Fund. This book was released on 2020-07-20 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: The extensive use of the US dollar when firms set prices for international trade (dubbed dominant currency pricing) and in their funding (dominant currency financing) has come to the forefront of policy debate, raising questions about how exchange rates work and the benefits of exchange rate flexibility. This Staff Discussion Note documents these features of international trade and finance and explores their implications for how exchange rates can help external rebalancing and buffer macroeconomic shocks.

Download or read book Strengthening the Euro Area written by Mr.Romain A Duval and published by International Monetary Fund. This book was released on 2019-06-13 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: The SDN will focus mostly on EA countries but also touch on other AEs for comparison purposes. The SDN will make several original contributions in each of the areas above based on new DSGE-model-based analysis, cross-country panel regressions, and individual-level (firm- or household-level) empirical work where appropriate.

Download or read book Euro Area Policies Selected Issues written by International Monetary Fund and published by INTERNATIONAL MONETARY FUND. This book was released on 2009-07-30 with total page 30 pages. Available in PDF, EPUB and Kindle. Book excerpt: This Selected Issues paper discusses the effectiveness of monetary policy in the euro area in the context of the financial crisis, the need for special resolution regimes for financial institutions in the European Union (EU), and the proposed new EU financial stability arrangements. The paper analyzes the European Central Bank's response to the global financial crisis and discusses ways forward. The case for establishing or improving resolution regimes for financial institutions in EU countries is also outlined.

Download or read book A Strategy for Resolving Europe s Problem Loans written by Mr.Shekhar Aiyar and published by International Monetary Fund. This book was released on 2015-09-24 with total page 79 pages. Available in PDF, EPUB and Kindle. Book excerpt: Europe’s banking system is weighed down by high levels of non-performing loans (NPLs), which are holding down credit growth and economic activity. This discussion note uses a new survey of European country authorities and banks to examine the structural obstacles that discourage banks from addressing their problem loans. A three pillared strategy is advocated to remedy the situation, comprising: (i) tightened supervisory policies, (ii) insolvency reforms, and (iii) the development of distressed debt markets.

Download or read book Sovereign Risk and Belief Driven Fluctuations in the Euro Area written by Giancarlo Corsetti and published by International Monetary Fund. This book was released on 2013-11-06 with total page 49 pages. Available in PDF, EPUB and Kindle. Book excerpt: Sovereign risk premia in several euro area countries have risen markedly since 2008, driving up credit spreads in the private sector as well. We propose a New Keynesian model of a two-region monetary union that accounts for this “sovereign risk channel.” The model is calibrated to the euro area as of mid-2012. We show that a combination of sovereign risk in one region and strongly procyclical fiscal policy at the aggregate level exacerbates the risk of belief-driven deflationary downturns. The model provides an argument in favor of coordinated, asymmetric fiscal stances as a way to prevent selffulfilling debt crises.

Download or read book European Variations as a Key to Cooperation written by Ernst Hirsch Ballin and published by Springer Nature. This book was released on 2020-01-02 with total page 192 pages. Available in PDF, EPUB and Kindle. Book excerpt: This Open Access book offers a novel view on the benefits of a lasting variation between the member states in the EU. In order to bring together thirty very different European states and their citizens, the EU will have to offer more scope for variation. Unlike the existing differentiation by means of opt-outs and deviations, variation is not a concession intended to resolve impasses in negotiations; it is, rather, a different structuring principle. It takes differences in needs and in democratically supported convictions seriously. A common core remains necessary, specifically concerning the basic principles of democracy, rule of law, fundamental rights and freedoms, and the common market. By taking this approach, the authors remove the pressure to embrace uniformity from the debate about the EU’s future. The book discusses forms of variation that fall both within and outside the current framework of European Union Treaties. The scope for these variations is mapped out in three domains: the internal market; the euro; and asylum, migration and border control.

Download or read book Europe and the Euro written by Alberto Alesina and published by University of Chicago Press. This book was released on 2010-04-15 with total page 477 pages. Available in PDF, EPUB and Kindle. Book excerpt: It is rare for countries to give up their currencies and thus their ability to influence such critical aspects of their economies as interest and exchange rates. Yet ten years ago a number of European countries did exactly that when they adopted the euro. Despite some dissent, there were a number of arguments in favor of this policy change: it would facilitate exchange of goods, money, and people by decreasing costs; it would increase trade; and it would enhance efficiency and competitiveness at the international level. A decade is an ideal time frame over which to evaluate the success of the euro and whether it has lived up to expectations. To that aim, Europe and the Euro looks at a number of important issues, including the effects of the euro on reform of goods and labor markets; its influence on business cycles and trade among members; and whether the single currency has induced convergence or divergence in the economic performance of member countries. While adoption of the euro may not have met the expectations of its most optimistic proponents, the benefits have been many, and there is reason to believe that the euro is robust enough to survive recent economic shocks. This volume is an essential reference on the first ten years of the euro and the workings of a monetary union.

Download or read book Structural Policies in the Euro Area written by Ralph Setzer and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Structural policies in the euro area are of great interest for the Eurosystem, particularly as they can support the smooth functioning of the Economic and Monetary Union (EMU) and the effectiveness of monetary policy. This paper adopts a broad definition of structural policies, analysing not only the benefits of efficient labour, product and financial market regulations, but also emphasising the importance of good governance and efficient institutions that ensure high quality and impartial public services, the rule of law and the control of rent-seeking. The paper concludes that there are many opportunities for enhanced structural policies in EU and euro area countries which can yield substantial gains by boosting long-term income and employment growth and supporting social fairness, also via better and more equal opportunities. It provides empirical and model-based analyses on the impacts and the interactions of structural policies, highlighting synergies between growth and inclusiveness, while acknowledging that structural policy changes need to be country-specific to reflect national conditions and social preferences. Well-designed structural policies would also strengthen economic resilience and convergence of Member States, bringing the euro area closer to the requirements of an optimal currency area and improving the transmission of monetary policy. The paper also discusses the political economy causes of the sluggish implementation of socially beneficial structural policies and assesses ways to deal with possible short-term costs of reforms.

Download or read book The Euro and Economic Stability written by Ewald Nowotny and published by Edward Elgar Publishing. This book was released on 2010-01-01 with total page 265 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Euro and Economic Stability assesses the euro area's merits as a shelter and the merits of euro assets as a safe haven and reviews the case for rapid euro adoption from a post-crisis view. Policymakers and economists provide relevant lessons from euro area divergences for future euro area members and, more generally, from the financial crisis, while banking representatives discuss post-crisis business models of banks in the area. Last but not least, a theoretical introductory chapter fills the gap between mainstream macroeconomic modelling and real-world decision-making. The prime audience for this invaluable book will be economists and other experts in the fields of economic policy and European integration from central, commercial and investment banks, governments, international organizations, universities and research institutes. The book is also aimed at readers with a particular interest in the contributions' special regional focus: Central, Eastern and South-Eastern Europe.

Download or read book Improving Cross border Payments in the Euro Area written by Simona Amati and published by Virago Press. This book was released on 2000 with total page 88 pages. Available in PDF, EPUB and Kindle. Book excerpt: A common means of payment for the European Union has almost been achieved but it has not been followed by a single payments area. Efficient cross border transfers have been created with the implementation of the Euro and cross-border wholesale payments can now be processed cheaply and quickly. However retail transactions are still hampered by inefficient procedures. The aim of this paper is to analyse the current situation in a number of selected financial institutions and outline ways for improvement.