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Doomsday for the Euro Area: Causes, Variants and Consequences of Breakup

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  • Ansgar Belke

    (Department for Macroeconomics, DIW Berlin, Mohrenstraße 58, 10117 Berlin, Germany
    Department of Economics, University of Duisburg-Essen, Universitätsstraße 12, 45117 Essen, Germany)

  • Florian Verheyen

    (Department of Economics, University of Duisburg-Essen, Universitätsstraße 12, 45117 Essen, Germany)

Abstract

In this paper we describe the genesis of a doomsday scenario and discuss potential causes and motivations for a breakup of the euro area. For this purpose, we differentiate between the departure of weak and strong countries, and examine the impact of the reintroduction of a national currency on domestic debt, the domestic banking sector, EU membership and the freedom of trade. We also briefly analyze the social and political costs of the accompanying social disorder.

Suggested Citation

  • Ansgar Belke & Florian Verheyen, 2012. "Doomsday for the Euro Area: Causes, Variants and Consequences of Breakup," IJFS, MDPI, vol. 1(1), pages 1-15, July.
    • Handle: RePEc:gam:jijfss:v:1:y:2012:i:1:p:1-15:d:18753
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    References listed on IDEAS

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    1. Ansgar Belke & Matthias Göcke & Martin Günther, 2009. "When Does It Hurt?: The Exchange Rate "Pain Threshold" for German Exports," Discussion Papers of DIW Berlin 943, DIW Berlin, German Institute for Economic Research.
    2. Ansgar Belke & Barbara Styczynska, 2006. "The Allocation of Power in the Enlarged ECB Governing Council: An Assessment of the ECB Rotation Model," Journal of Common Market Studies, Wiley Blackwell, vol. 44(5), pages 865-897, December.
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    6. Ansgar Belke & Christian Dreger, 2011. "Ramifications of Debt Restructuring on the Euro Area: The Example of Large European Economies' Exposure to Greece," Discussion Papers of DIW Berlin 1141, DIW Berlin, German Institute for Economic Research.
    7. Weidenmier, Marc, 2010. "This Time is Different: Eight Centuries of Financial Folly. By Carmen Reinhart and Kenneth Rogoff. Princeton, NJ: Princeton University Press, 2009. $35.00," The Journal of Economic History, Cambridge University Press, vol. 70(3), pages 766-768, September.
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    9. Belke, Ansgar & von Schnurbein, Barbara, 2010. "European Monetary Policy and the ECB Rotation Model – Voting Power of the Core versus the Periphery," Ruhr Economic Papers 175, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
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    Cited by:

    1. Nektarios A. Michail & Christos S. Savva & Demetris Koursaros, 2017. "Size Effects of Fiscal Policy and Business Confidence in the Euro Area," IJFS, MDPI, vol. 5(4), pages 1-15, November.

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