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Single currency and supranational constraints to fiscal policies in the Eurozone during the crisis

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  • C. Petraglia
  • F. Purificato

Abstract

This paper reviews the current debate on the causes and remedies of the recent European sovereign debt crisis. The survey starts from the observation that different views seem to share the following point: the non-optimality of the Eurozone. The European Institutions have identified two main causes of the crisis: high public debts in the peripheral countries of the Union and their delay in implementing structural reforms. As a consequence, the cost of the adjustment has been exclusively supported by GIPSI countries. However, the recessionary effects produced by austerity policies have been far more intense and long-lasting than predicted. After the failure of fiscal austerity, the heterodox vision has gained credibility: real imbalances between the core and the periphery of the Union are responsible for the current crisis. Ultimately, the main lesson of the crisis is that, given the systematic asymmetries across Member States, the Eurozone will be unable to gain sustainability unless a process of fiscal union will start.

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  • C. Petraglia & F. Purificato, 2013. "Single currency and supranational constraints to fiscal policies in the Eurozone during the crisis," Rivista economica del Mezzogiorno, Società editrice il Mulino, issue 4, pages 1065-1094.
  • Handle: RePEc:mul:jqyfkm:doi:10.1432/76807:y:2013:i:4:p:1065-1094
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    Cited by:

    1. G.L.C. Provenzano, 2016. "European and National Cohesion Policies and a Lack of Convergence: the Case of Southern Italy," Rivista economica del Mezzogiorno, Società editrice il Mulino, issue 1, pages 177-226.
    2. Carlo Panico, Francesco Purificato, Elvira Sapienza, 2015. "Benefici, problemi e prospettive dell’integrazione monetaria in Europa (Benefits, issues and future of monetary integration in Europe)," Moneta e Credito, Economia civile, vol. 68(271), pages 305-339.
    3. L. Giordano & A. Lopes, 2016. "Monetary Policy, Credit and Territorial Imbalances in Europe in Crisis Times," Rivista economica del Mezzogiorno, Società editrice il Mulino, issue 1, pages 121-176.
    4. G.L.C. Provenzano, 2014. "Why has the South fallen behind? The role of policies. A contribution to this debate starting from Emanuele Felice's volume," Rivista economica del Mezzogiorno, Società editrice il Mulino, issue 4, pages 991-1048.
    5. Adriano Giannola & Riccardo Padovani & Carmelo Petraglia, 2015. "Spending Review e divari regionali in Italia," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2015(1), pages 129-155.

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