|
EconStor >
Cardiff University >
Cardiff Business School, Cardiff University >
Cardiff Economics Working Papers >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/10419/65773
|
| | |
| Title: | | The option of last resort: A two-currency EMU  |
| Authors: | | Arghyrou, Michael G. Tsoukalas, John D. |
| Issue Date: | | 2010 |
| Series/Report no.: | | Cardiff Economics Working Papers E2010/14 |
| Abstract: | | This article, originally published at www.roubini.com on 7 February 2010, spells out our two-currency EMU proposal as a plan of last resort for resolving the present EMU sovereign-debt crisis. The key ingredients of our proposal involve a temporary split of the euro into two currencies, both run by the European Central Bank. The hard euro will be maintained by the core-EMU members whereas periphery EMU countries will adopt for a suitable period of time the weak euro. All existing debts will continue to be denominated in strong-euro terms. The plan involves a one-off devaluation of the weak euro versus the strong one, simultaneously with the introduction of far-reaching reforms and rapid fiscal consolidation in the periphery EMU countries. We argue that due to enhanced market credibility, our two-tier euro plan has a realistic chance of success in resolving the EMU crisis, if all other approaches fail. |
| Subjects: | | euro two-currency EMU |
| JEL: | | E44 F30 G01 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Cardiff Economics Working Papers
|
| |
| | |
Download bibliographical data as:
BibTeX
|
| |
Share on:http://hdl.handle.net/10419/65773
|
Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.
|