The European economy was hit by a confidence shock in 2009 when the Greek government of Papandreou discovered the true amount of public deficit. The subsequent loss of trust in European fiscal governance reduced financial markets' willingness to lend to indebted governments. The European Union...

The future emergence of a European monetary zone is set to transform the configuration of the international monetary system and the roles of the dollar, the Euro and the yen within this system. This book addresses this issue with discussion of: * exchange rate policies pursued in the principal...

This paper gives an overview of the causes of the European debt crisis and the consequences for the external relations. It finds that political mishandling has increased uncertainty, which has contributed to a tendency for the euro to become weaker.

Due to collective action problems, the Eurozone is stuck in a sub-optimal macropolicy mix of too expansionary fiscal policy and too restrictive monetary policy. Although the Lisbon strategy pays lip service to macroeconomic policy coordination, no mechanisms, institutions or effective rules are...

In this paper, the sustainability of public debt is interpreted as the result of the interaction of fiscal policy with the economic environment, and not as a statistical concept as in most of the recent literature. If debt must not explode over time, policy makers have to respond to the changing...