The Incomplete Currency

Chapter 11Proposals of Monetary Policy Interventions to Overcome the Crisis

In the previous chapters, we have seen that, during the evolution of the Eurozone crisis from a debt crisis to a growth crisis, a wide variety of “definitive” proposals has been developed, aimed at pulling out the member countries of the Monetary Union from the quagmire of the process of divergence in sovereign yields that also fuelled a dangerous divergence of the economic cycles of these countries.

If there is an anchor point that we are able to support after this analysis, it is that a permanent solution to the problems of the Eurozone must work systemically, involving the whole European financial architecture and operating a net transfer of benefits to the states in difficulty, minimising the costs to the European economy of such “aid”.

It follows that any intervention–even structural–that is implemented only at the level of individual countries cannot permanently solve their economic and financial problems. In the case of countries like Italy or Spain, there is no doubt that there are structural problems to deal with, such as the reform of the administrative structure, justice system, the fight against tax evasion and corruption. However, to focus exclusively on these problems will not be enough to bring these countries back on a path of stable growth in output and employment.

Similarly, there is no doubt that interventions at European level should occur to address the harmonisation of tax policies ...