Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/146970
Authors: 
Bibow, Jörg
Year of Publication: 
2015
Series/Report no.: 
Working Paper, Levy Economics Institute 842
Abstract: 
The euro crisis remains unresolved and the euro currency union incomplete and extraordinarily vulnerable. The euro regime's essential flaw and ultimate source of vulnerability is the decoupling of central bank and treasury institutions in the euro currency union. We propose a 'Euro Treasury' scheme to properly fix the regime and resolve the euro crisis. This scheme would establish a rudimentary fiscal union that is not a transfer union. The core idea is to create a Euro Treasury as a vehicle to pool future eurozone public investment spending and to have it funded by proper eurozone treasury securities. The Euro Treasury could fulfill a number of additional purposes while operating mainly on the basis of a strict rule. The plan would also provide a much-needed fiscal boost to recovery and foster a more benign intra-area rebalancing.
Subjects: 
Economic and Monetary Union
Euro Crisis
Euro Treasury
Fiscal Union
Public Investment
JEL: 
E32
E62
E63
H62
H63
Document Type: 
Working Paper

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