Author: Xavier Vanden Bosch / Topic: International Trade and Finance

Author:: Xavier Vanden Bosch
Publication Date:: 03-2014
Content Type:: Policy Brief
Institution:: EGMONT - The Royal Institute for International Relations
Abstract:: In recent years much has been accomplished to make the EMU more resilient to banking crises, sovereign-debt crises or balance-of-payment crises. Several 'backstops' or financial safety nets were progressively put in place to absorb the shocks that could have otherwise broken the EMU as a system. These substantial advances reflected a gradual, trial-and-error approach rather than a grand design that would have completely overhauled the EMU architecture. While flexibility and realism have advantages, complacency is a clear risk. With no roadmap to follow, efforts to complete the architecture of the EMU may fade with time. Maintaining a sense of direction is crucial while potential vulnerabilities remain.
Topic:: Economics, International Trade and Finance, and Financial Crisis
Political Geography:: Europe

Author:: Xavier Vanden Bosch
Publication Date:: 01-2013
Content Type:: Policy Brief
Institution:: EGMONT - The Royal Institute for International Relations
Abstract:: Fiscal consolidation is essential to ensure the sustainability of euro zone countries' public debt. However, as a principle, consolidation should not be pursued at a pace unnecessarily undermining growth in the short term. Repeated downward revisions of growth call for the use of the flexibility foreseen in the EU fiscal framework. The Commission should adapt the deadlines for fiscal correction to prevent excessive, pro-cyclical adjustment in 2013. In turn, adequate surveillance and coordination must ensure structural adjustments constitute the core of fiscal consolidation plans.
Topic:: Debt, International Trade and Finance, Monetary Policy, and Reform
Political Geography:: Europe

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