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Reformation or exodus: Assessing the future of the Euro

Author

Listed:
  • Martin Watts

    (The University of Newcastle, Australia)

  • Timothy Sharpe

    (Nottingham Trent University, UK)

  • James Juniper

    (The University of Newcastle, Australia)

Abstract

Eurozone economies were the most adversely affected by the Global Financial Crisis, with forecast macroeconomic outcomes still highly uncertain. This article argues first that the Eurozone policy framework can be viewed as neo-liberalism overlaid with policy constraints associated with a mis-specified Optimum Currency Area. We are critical of this framework since it is incompatible with the policy sovereignty that is experienced, if not utilised, by sovereign economies such as the USA, UK and Australia. Second, recent and proposed policy reforms which generally lie within the constraints of the Eurozone framework are examined. We conclude that these policies are piecemeal and fail to restore policy sovereignty, which ultimately requires that member countries exit the Eurozone. Key issues associated with such an exit are briefly discussed.

Suggested Citation

  • Martin Watts & Timothy Sharpe & James Juniper, 2014. "Reformation or exodus: Assessing the future of the Euro," The Economic and Labour Relations Review, , vol. 25(3), pages 465-483, September.
    • Handle: RePEc:sae:ecolab:v:25:y:2014:i:3:p:465-483
    DOI: 10.1177/1035304614544273
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    European Monetary Union; fiscal and monetary policy; Global Financial Crisis; sovereignty;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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