The future of the Euro after the Great Recession by Javier Andrés and Rafel Domenech

/JAVIER ANDRES * / RAFAEL DOMENECH**/

The future of the Euro
after the Great Recession 1

Summary; 1. Introduction; 2. From the Great Moderation to the Great
Recession; 3. The imbalances in Europe and in the EMU; 4. The new
European governance and the future of the Euro; 4.1. Changes in fiscal
governance; 4.2. Financial integration; 4.3. Economic integration; 5.
Conclusions.

Summary

In this chapter we shall analyse the challenges the Eurozone is facing and

proposals to deal with them via improved economic governance. To do so,

* Javier Andrés is professor of Fundamentals of Economic Analysis at the University of
Valencia and visiting professor of the University of Glasgow. http://iei.uv.es/javierandres/
** Rafael Doménech is Chief Economist of Developed Economies, BBVA Research and
Professor of Fundamentals of Economic Analysis at the University of Valencia.
http://iei.uv.es/rdomenec

1 The authors thank A. Deligiannido, A. García, M. Jiménez, and E. Prades for their assis-
tance and comments on this work, as well as the help from CICYT projects ECO2008-
04669 and ECO2011-29050.

15

The future of the Euro after the Great Recession

we shall first examine the reasons behind the accumulation of significant

imbalances in the developed economies and among the EMU countries,

mainly since 2001 until the crisis in 2007, as a result of a pattern of unsus-

tainable growth in many developed economies. Secondly, we shall offer an

in-depth analysis of the significance of such imbalances and the heteroge-

neity which exists between EMU countries. Lastly, we shall study the cha-

llenges presented by the improvement of the economic governance of the

EMU from a fiscal, financial and economic integration perspective, which

shall determine its economic future in the short and long term.

1. Introduction

The international economic crisis which begun in 2007 is
having an extraordinary impact on the European economy, and for
the coming decades, will leave a deep mark in many of its mem-
bers. The crisis has shown that the growth process undergone bet-
ween 1994 and 2007, particularly following the creation of the
Economic and Monetary Union (EMU) in 1999, had entered into
an unsustainable dynamics in the long term. The appearance of
important macroeconomic imbalances among EMU members was
taking shape within the framework of steady growth, inflation
under control, very low interest rates and a very reduced risk assess-
ment (partly as a result of the disappearance of currency risk) in the
context of a world saving glut. Although the Eurozone as a whole
presents smaller aggregate imbalances in terms of deficit and pri-
vate, public and foreign debt than, for instance, the US or the
United Kingdom, the expectations of economic convergence

16

The Future of the Euro

among Eurozone countries and the appearance of financial bubbles
with the promise of high yields, led to very significant capital flows
among its members. This added to a spiralling increase in house-
hold debt and businesses in some of the member countries, gene-
rating very considerable and longstanding deficits in current
account balances. These expectations petered out sharply as of the
subprime crisis of 2007 and, since then, Europe has been experien-
cing different surges of financial crises, economic crises and sove-
reign debt crises, which have been following on and feeding off
each other over time.2 The result of this complex situation has been
that, albeit with differences in the intensity and the severity of the
problems (see, for instance, Doménech and Jiménez, 2010), a sig-
nificant number of European countries have experienced a situa-
tion similar to that of the sudden stops experienced in the past by
some emerging economies, leaving public and private sectors heavily
indebted and, in some cases, extremely high rates of unemployment.

The aim of this chapter is to analyse the changes required by the
EMU and proposals with which to face such challenges with suc-
cess. In order to understand what the problems are and, therefore,
their possible solutions, in the second section we analyse the rea-
sons why important imbalances accumulated in the developed eco-
nomies and among the EMU countries during one of the most sta-
ble periods of economic prosperity in the last decades (the Great
Moderation), which nevertheless gave way to an unsustainable

2 Shambaugh (2012) performs an excellent analysis of the interaction between fiscal,
financial and economic crises in the Eurozone.

17


growth pattern in many economies. In the third section, we offer
an in-depth analysis of the magnitude and implications of such
imbalances throughout the crisis, which are well summarised in the
Excessive Imbalance Procedure (EIP) recently implemented by the
EU, as well as the current heterogeneity among EMU countries. The
fourth section analyses the challenges of improvement of economic
governance of the EMU from a fiscal, financial and economic inte-
gration standpoint, which shall determine its short and long term
economic future. Lastly, the fifth section presents the main conclu-
sions reached in this paper.

2. From the Great Moderation to the Great Recession

In the period between the mid-1990s and 2007, developed eco-
nomies enjoyed one of the greatest economic growth periods,
known as the Great Moderation due to the low volatility of growth
rates in those years. Graph 1 shows evidence of this for the US and
the EMU in terms of GDP per person of employable age. As can be
seen, from the mid-1990s to 2007 there was sustained growth, with
levels well above the historical trend estimated since 1970 for both
geographical areas. In fact, the growth in GSP per person of emplo-
yable age was slightly higher in the EMU than in the US, although
not enough to bridge the gap between both economies.

The Great Moderation generated the perception that economic
cycles would have less volatility, as a result of better managed eco-

18


nomic policy (see, for instance, Galí and Gambeti, 2009, or the
references appearing in this article). In fact, these high growth rates
with low volatility came hand in hand with inflation under con-
trol and low interest rates across the board of financial assets, with
practically inexistent risk premiums in many cases as a result of the
underassessment of the risk. In light thereof, some analysts went as
far as to proclaim the disappearance of the economic cycle and the
capacity to avoid significant economic recessions. It was the com-
binations of these forces which fed the financial imbalances which,
for economists like Rajan (2005) or Borio & White (2005), among
others, are behind the crisis which began in 2007.

There are various economic factors which contributed to genera-
te this combination on which the Great Moderation was erected. In
the first place, the central banks of the developed economies carried
out a low interest rate policy or money glut, as a result of: i) the drop
in the inflation of sellable assets following the inrush of exporting
countries in the international economy with a very abundant and
cheap workforce and depreciated currencies; ii) the benign neglect
policy in regard to the high prices of financial and real estate assets
(Bordo & Jeane, 2002, or Bean 2004 & 2010); and iii) the attempt to
prevent the recession in the US, following the burst of the techno-
logical bubble, or in Germany, following the costly process of reu-
nification and the burst of its real estate bubble.

Secondly a savings glut took place on a worldwide level in
China, Japan, Germany, oil producing countries or the pension

19


funds of developed economies.

Thirdly, and as a response the savings glut in some countries
and sectors, a formidable increase took place in the demand of safe
assets, moving from the pre-eminence of individual savers to that
of large sovereign funds, investment funds or pension funds which
prioritize safety over yield and which seek to channel savings
towards fixed income rather than towards the acquisition of any
other kind of asset. At the same time that the demand for safe
financial assets (i.e. AAA) increased, there was a relative scarcity of
such assets in the case of sovereign debt, due to the fiscal consoli-

Chart 1
GDP per person of employable age in the US and in the EMU

Source: OEDC (2012) Economic Outlook Database.

20


dation taking place simultaneous in many developed economies as
a result of the high growth in GDP. This surplus demand for safe
assets created enormous pressure in the financial markets and in
certain types of assets, which in turn led to the appearance of bub-
bles in certain market segments. The pressure was such that finan-
cial deregulation and engineering came to the rescue, enabling the
response of the financial markets to this scarcity in AAA assets to
be the creation of multiple derivatives and the issue of huge volu-
mes of asset backed securities, as shown in Graph 2. In turn, this
generated enormous liquidity to fund those assets acting as the
underlying assets (for example, mortgages on homes), thus crea-

Chart 2
Issue of Asset backed Securities 1985-2011

Source: SIFMA

21


ting a circle in which asset demand stimulated supply, which in
turn was fed back into the process by boosting demand with the
creation of new assets.

As a result of this process, a specialization in asset production
took place on an international level, leading to enormous hetero-
geneity by country, sector and agents. Whereas some countries
generated a surplus in net savings, others (US, Spain or Ireland) res-
ponded to the very low interest rate incentive by generating the
real investments which served as the underlying assets for finan-
cial securities. The US produced assets on a world scale considered
safe by the markets, thanks to the specialization of its financial ser-
vices. Other countries, such as Spain and Ireland, carried out a
similar role, but on a European scale, producing assets backed by
safe collateral (homes) or with no collateral, but issued by financial
institutions deemed to be safe, which attracted savings funds or
large European banks.

In fourth place, the creation of the EMU meant the disappearan-
ce of exchange rate risk among its members. This removed an impor-
tant barrier to capital flows within the EMU and encouraged the pre-
viously described process. But its effects went even beyond the disap-
pearance of currency risk. In the international financial markets, as
well as in the EMU countries, expectations that the greater monetary
and economic integration ensured the economic convergence of its
members were generated, which justified the disappearance of any
type of risk premiums (see Ehrmann et al, 2011).

22


Graph 3 clearly shows the almost full disappearance of risk pre-
miums for countries becoming part of the EMU. Without doubt,
Greece was a paradigmatic example of this process, going from fun-
ding at 25% in 1993 to do at the same interest rate as Germany, follo-
wing its entry into the Eurozone.

Chart 3
10 year public debt interest rates in the EMU, 1995-2011

Source: ECB, Bloomberg

The implications of such expectations of economic convergence
were very important in terms of imbalances in the current balance.
Under the assumption that a real and economic convergence pro-
cess was taking place, well beyond the nominal, it seemed natural
that capital should flow towards the economies with lower per capi-

23


ta incomes, as economic theory predicts (see, for example, Barro,
Mankiw & Sala-i-Martin, 1995).

In fact, as the risk premiums were disappearing, the correlation
between the savings rated and investment rate were reduced. As
was already anticipated by Blanchard and Giavazzi (2002), since
1999 to the start of the crisis, the Feldstein-Horioka paradox disap-
peared completely, as shown in Graph 4. Coinciding with the
reduction in the typical deviation of risk premiums, which reached

Chart 4
Typical deviation of risk premiums and correlation between the rate of investment and
the rate of savings, EMU, 1993-2011

Source: Bloomberg

24


almost zero as of 1998, the correlation between the national invest-
ment rate and the savings rate was observed to have been nil or
even negative, compared to the positive and statistically significant
values of the beginning of the nineties.

In fifth place, a permissive regulation, together with reduced
interest rates and very high competition in the financial sector
generated the incentives required for the generation of profit to be
done via transaction volume instead of via price margins (mainly
interest rates), favouring a very important leveraging of broad seg-
ments of the private sector. One of the results of this process was
the intensification of a new banking business model, based on the
granting of collateral backed loans, the generation of financial
assets from such loans and the distribution thereof as asset-backed
securities in asset packages (originate to distribute) which transfe-
rred credit risk in full to the purchasers of these new generated
assets. Compared with the traditional bank business, in which
financial institutions that grant the credits keep the risk on their
balance sheets, this new business model led to greater intercon-
nection of the balance sheets among financial institutions all over
the world and a significant increase in contagion risk.

3. The imbalances in Europe and the EMU

The financial crisis was preceded by a period of economic prospe-
rity, measured by conventional indicators of growth, macroecono-

25


mic stability and inflation, during which enormous imbalances of a
financial and competitive nature have been created. However, a
glance of the macroeconomic picture of the EMU reflects a situation
of balance which we do not find in other important economic
regions of the world (Table 1). Both the deficit and public debt levels
and the net foreign positions and private indebtedness are generally
lower to those recorded in the United States or the United Kingdom.

However, the EMU has had other problems hanging over it which
have led the economy of the region – and that of the whole of the
EU by extension – to the situation of stagnation which it is currently
undergoing. Some of these problems are of a structural nature, and
others are related to the extraordinary disparities between member
states in their key indicators to which, until very recently, we had
paid little attention. Among the first are demographic evolution and
low productivity growth which in turn have provoked a limited rate
of growth in employment. But the disparities and the heterogeneity
within the EMU are the most outstanding imbalances, as they call
for a serious amendment in the operation of the Euro, whose main
objective was to accelerate convergence among countries who adop-
ted the single currency along with other common institutions.

The European Commission has recently implemented a pro-
gramme to monitor a number of indicators to detect and track
macroeconomic and financial imbalances in countries within the
EU (the EIP). One of these indicators summarises, over all others,
the nature of the main problem facing the European economy:

26


the gradual and persistent disparity in the current account of its
member countries. Although the EMU and the EU are economies
which can be described as economies which contribute (and
demand) little net savings to (and from) foreign savings, their
aggregate results is the sum of extremely disparate realities. As
Lane (2010) points out, in 2010 European countries accounted for
approximately one third of all current account deficits and sur-
pluses worldwide. As can be seen in Graph 5, the current account
deficits and surpluses of the EMU have gradually polarised from
levels ranging between the [-3%-, +3%] interval, in proportion to
the GDP to position itself outside of this range and even persis-
tently above it by 5%. The underlying causes and macroeconomic
implications of this type of imbalance are extremely complex.

Table 1
Debts and deficits in the EMU, US and United Kingdom (% GDP)

EA17 US UK

Budget balance of
2011 -4.4 -9.6 -8.9
public administrations
Debt of public
2011 87.6 100.0 84.8
administrations

Household debt 2010 67.3 92.1 106.1

Corporate debt 2010 119.1 74.6 123.7

Current account
2011 0.1 -3.1 -2.7
balance

Net international
2010 -7.2 -17.0 -13.9
position

Sources: AMECO, Haver, IMF, national sources and BBVA Research

27


It is true that this polarisation is not an exclusively European
phenomenon, as it happens in parallel with the so-called “global
imbalances” generated during the recent globalisation process.
However, in contrast to what is happening on a world scale and par-
ticularly in a series of developed countries (the Anglosphere) and
emerging countries (particularly China) in Europe there is a positi-
ve correlation between levels of income per capita and sales deficit,
so that the capital flows from the more advanced countries to the
less developed. This has rendered such imbalances less conspicuous,
as they have been associated with the real convergence process. The
traditional view considered foreign indebtedness as a natural con-
sequence of the catching up process during which the countries
undergoing rapid growth required foreign savings to fund strong
domestic investment in commercial goods. Thus, the availability of
savings and the Euro allowed for the funding of the productivity
convergence without financial and exchange rate strangulation.
The international allocation of savings was deemed to be optimal
(“consenting adults”, Obstfeld, 2012), and there was no reason for
public political intervention – what became known as “benign
neglect” by Blanchard and Giavazzi (2002) or Edwards (2002).

It is not easy to determine an optimal level, or even an adequate
one, for the current account deficit which already reflects the gap
between domestic savings and investment in a country which is
assumed to have been optimally determined by consumers and busi-
nesses, unless it is associated with high public deficit, in which case
we would be dealing with a fiscal problem. Moreover, a country may

28


have a deficit current account without having a serious foreign
financing problem, or may have it despite having a regularised
account, in this case because despite a reduced net capital flow, what
matters in the event of a financial crisis is the size of the gross flows,
as nothing guarantees that national savers are willing to fund
domestic liabilities should the international markets become una-
vailable. However, the evolution of the current account of EMU coun-
tries (EU) reflects more deep-rooted problems where the adjustment
role of the market mechanism has proven insufficient and in which
gross financial flows have grown in a fast and imbalanced way.

Chart 5
Current account balance (% GDP)

Source: BBVA Research with data from national sources

29


The deficits have not been linked with productivity convergen-
ce, as is evident in the cases of Spain, Portugal and, to a certain
extent, Ireland, which accumulated growing deficits despite the
slow growth of total productivity of the factors. As can be seen in
Graph 6, productivity grew by 1% on average, whereas the current
account balance varied between surpluses over 5% (the
Netherlands and Germany) and deficits of 10% (as in Portugal and
Spain). In fact, it has not only been the lure of investment but
mainly the fall in savings in peripheral countries which has caused
the gap in commercial deficit which has exceeded both in volume
– percentage of GDP – and in persistence, that observed in many
emerging countries prior to the crisis of the eighties and nineties.
Moreover, much of the foreign financing to the receiving countries
has not been channelled through direct and portfolio investment,
but by way of bank bonds, which increases the risk of bank crises
and ‘sudden stops’ (Jaumotte and Sodsriwiboon, 2010; Land,
2010).

However, the most worrying characteristic of the unequal per-
formance of the current account in Europe is its persistence. Far
from being a transitory phenomenon, the divergence between
commercial balances has sharpened until 2007 (see Graph 5). The
design of the Euro took into account that the absence of own
currency would hinder the traditional adjustment to which most
countries resorted in times of crisis in the balance of payments.
The impossibility of this recourse to devaluation has not come
hand in hand with the strengthening of real devaluation mecha-

30


nisms, that is, with a more flexible response by prices and salaries.
Between 2000 and 2010, enough time has lapsed to have expected
that the countries with most foreign debt and strong real apprecia-
tions should have begun a process of correction towards a surplus
in the commercial balance. Nevertheless, this has not been the
case. The correlation between the commercial deficit and the net
foreign position was positive in 2011 and in 2010 (Graph 7) as it
had been in the last decade, indicating that the private
savings/investment balance does not seem to respond to the cumu-
lative net foreign position.

Chart 6
Current Account Balance in 2007 (% of GDP) and average productivity growth bet-
ween 2000 and 2009.

Source: BBVA Research based on AMECO

31


In 2010 only four EMU countries had a net positive foreign posi-
tion – Belgium, Germany, the Netherlands and Finland – and only
Finland had managed it after correcting a very negative position in
2001 (that is, after a decade of foreign rapid growth and surplus).
Practically all other EMU countries saw their net indebtedness
increase substantially or, at best, such as in France or Austria, they
managed a moderate reduction thereof within the first ten years of
the single currency.

Therefore, the performance of the current account is a very use-
ful indicator – although naturally not infallible – of the way in
which a country responds to the commercial and financial globa-
lisation process and to the existence of other types of imbalances
associated with private sector debt, both financial and non-finan-
cial. Before reviewing these indicators for the EMU (EU), it is worth
asking why the (market) adjustment mechanisms have failed in
this case and what the risk of this situation is happening again in
the future.

The conventional current account approach indicates that
financial flows are a mere counterpart of commercial flows, so that
sustainability of foreign debt must be guaranteed by the expecta-
tion of future current account surpluses or, what is the same, by a
significant proportion of the commercial goods production in the
economy. Foreign financing is no at risk while foreign investors
consider the economy to be competitive. The domestic economy
must maintain a high productivity growth rate and competitive

32


labour costs, as the opposite would render the foreign deficit
unsustainable, foreign investment would drop, reducing prices and
salaries and improving the foreign balance. In this way, given rea-
sonable elasticity in the demand of exports and imports, the
periods of real appreciation and foreign deficit can be reversed wit-
hout deep structural changes.

However, this market mechanism has not worked in peripheral
Europe. Foreign funding has been used to a large extent to fund

Chart 7
Current account balance and net international position

Source: BBVA Research based on Eurostat

33


non-commercial goods, leading to strong expansion of demand, of
prices and of labour costs (see Graph 8). Despite the loss of com-
petitive capacity, the appeal for foreign lenders continues provided
the value of the asset with real guarantees – such as homes – con-
tinues, which is perceived as relatively safe. Thus, the worsening
competitiveness is the effect and not only the cause for the dete-
rioration of the current account. But the existence of high com-
mercial deficit is not corrected of its own accord nor is it done in a
smooth and orderly manner. When the bubble bursts and prices of
the assets used as guarantees plummet, foreign investors perceive
that the national economy is no longer able to guarantee their
debt, leading to the well-known processes of flight to quality,
increase in the cost of debt and, in extreme cases, to sudden stops.

This integration process has led to a number of other imbalan-
ces in the European economies. The objective of the EIP is to go
beyond the control of deficit and debt, and to follow a number of
economic indicators which enable the detection of inadequate
macroeconomic development in a country and can lead to locali-
sed financial crises and even contagion in the future. Such indi-
cators come hand in hand with a number of ‘limits’ that are con-
sidered to be security measures which, when exceeded by a
country, special tracking must be carried out by the Commission.
If an economy is showing imbalance in several of these indicators,
it must propose a plan of action for correction thereof which, if
not suitably applied, might result in some form of political or eco-
nomic penalty. The list of indicators is the following (the limits

34


above which a form of relevant imbalance is detected appear in
brackets): current account balance (% GDP, -4%, 6%); net inter-
national position (% GDP, -35%); real effective exchange rate
(variation rate, -5%, 5%); export market share (growth rate, -6%);
nominal unitary labour cost (growth rate, 9%); cost of housing
(growth rate, 6%); credit flow to private sector (% GDP, 15%); pri-
vate sector debt (% GDP, 1605); public debt (% GDP, 60%); and
unemployment rate (10%).

Chart 8
Growth of nominal salaries and real productivity

Source: BBVA Research based on Eurostat

35


The first report issued on the monitoring of these indicators
shows that in the third year since the start of the crisis (2010), the
imbalances accumulated in recent years are far from being correc-
ted, some of them having worsened since 2007 (Table 2). Greece,
Portugal, Ireland and Spain are the countries with worse qualitati-
ve results. They belong to the Eurozone periphery, where they fail
in at least five of the ten criteria.3

It is within the framework of such imbalances that we must
interpret the fiscal crisis that has been reflected in the general
growth of risk premiums of sovereign debt in Europe, especially in
peripheral countries – although not exclusively. The levels of public
debt in the EMU are comparable to those in the rest of the develo-
ped world, both if we consider the region as a whole or the coun-
tries within it separately. As is shown in Graph 6, only in 2008
three EMU countries (Greece, Italy and Belgium) had a public debt
above that of the US and in any case much lower than that of
Japan. The growth in public debt during the crisis period places
EMU countries – with the exception of Greece and Ireland – in the
realm of 20%, similar to what had happened in most of the deve-
loped countries. Therefore, behind the sovereign debt crisis there
are issues related to the economic governance of the EU in general
and the Eurozone in particular. But also, deeper reasons which have

3 The situation is worse if we take into account that indicators such as the growth rate
of housing prices and credit for the private sector are nowadays within the limits accep-
ted by the MIP as a result of the extraordinary restriction on credit suffered by most EU
economies.

36


become evident following the segmentation of the financial mar-
kets due to the crisis. On the one hand, we have the demographic
and structural characteristics of most of the countries, which
herald for the future a scenario of lesser growth than that before
the crisis. Graph 9 shows the growth rates up to 2007 and the fore-
casts made by the IMF up to 2015 for EMU countries, the United
Kingdom, Japan, and the US.

The aging population and its effects on participation in the
labour market, the low savings rates – with the ensuing difficulties
in funding investments – and the slow rate of productivity growth
explain such expectations, which in turn severely affect the capa-
city to absorb the strong increase in public indebtedness.

In second place, the economic crisis itself has generated an
additional burden on public finances by way of contingent liabili-
ties, the realisation of which shall depend on the performance of
the private debt and the need to apply measures to assist in the
reconversion of the financial sector. As stated by Reinhart & Rogoff
(2008 and 2009), one of the main consequences of financial crises
is that a large part of the private sector debt becomes public. Table
3 (ECB, 2012) shows the impact on public finances of the two
main contingent-type averages within the EMU: provisions for the
European Financial Stability Facility (EFSF) and the guarantees for
the banking sector. The sum of both would mean an additional
impact on the public debt in the EMU of almost 13% of the GDP.
It is true that such contingencies do not necessarily have to mate-

37

38
Table 2
Imbalances at the EMU

Source: European Commission (2012): First Alert Mechanism Report (moving averages, 3 or 5 years)


rialise, but it is also true that provisions have proven insufficient
and have had to be extended in successive programmes.

Chart 9
GDP Growth in 2007 and 2015

Source: IMF (2012)

Lastly, the aging of the population gives way to the generation
of implicit liabilities which are not considered in public debt figu-
res but should be taken into consideration when evaluating the
sustainability of public finances (Cecchetti, Mohanty and
Zampolli, 2010). In 2009 the IMF (IMF, 2009) calculated the sum of
implicit and contingent liabilities in securities exceed – in present
value – 400% of the average GDP of the G20. Of these, those of a
contingent nature associated with the crisis account for approxi-

39


mately one tenth, whereas that associated with an aging popula-
tion – pensions and social security – account for much higher
implicit obligations. As a whole, this type of liability will demand
a remarkable effort from public finances in the future. Cecchetti,
Mohanty and Zampolli (2010) place the additional permanent
financing required to meet such obligations at between 5 and 10
GDP points assuming a public debt at levels similar to the current
ones in developed countries.

In summary, some European economies may have reached debt
levels which exceed or are dangerously close to their fiscal limits,
defined as the maximum level of debt which a country is able to
fund. The fiscal limit depends on the political will of its citizens
and the capacity to increase income by means of tax rate rises (Bi,
2012 and Leeper & Walker 2011) which makes it specific to each
country. This might explain, at least in part, the differences obser-
ved in risk premiums between countries with similar levels of debt
or even that some countries pay a higher cost of financing that
others with much higher levels of debt. Moreover, the relationship
between the risk premium and the fiscal limit is non-linear, incre-
asing rapidly when fiscal performance places debt at such levels
that the likelihood of reaching the limit is significant (Bi, 2012).
That is to say, in order to observe significant risk premiums, it is
enough for investors to understand that the fiscal strategy of a
country leads it to a fair likelihood of reaching the maximum level
of debt financed, even if the probability of this taking place in the
short term is very small. This probability in turn grows over the

40


economic cycle, which obliges countries with greater volatility in
economic activity and unemployment to opt for stricter fiscal
rules.4

Table 3
Contingent Obligations of the governments 2008-2010

Banking sector
EFSF
guarantees
Belgium 7,3 12,7
Germany 8,22 3
Estonia 12,46 0
Ireland 42,8
Greece 25,8
Spain 8,61 6,2
France 7,97 3,1
Italy 8,78 2,7
Cyprus 8,78 15,7
Luxembourg 4,66 3,2
Malta 10,91 0
The Netherlands 7,32 6,1
Austria 7,19 5,7
Portugal 9
Slovenia 10,23 4,4
Slovakia 11,05 0
Finland 7,34 0
EMU 7,71 5,2

Source: BCE

4 When the economies reach this limit, the efficacy of the fiscal and monetary policy
is substantially reduced and both instruments no longer have the expected effects on
economic activity. The fiscal multipliers are reduced and the monetary authority loses
the capacity to control inflation, irrespective of the aggressiveness of its monetary
policy.

41


4. The new European governance and the future of the Euro

The economic crisis has highlighted the need to carry out
important changes in European governance. It is obvious that
there have been failures in coordination in the economic policy
and mistakes in the policies adopted by national government,
which have generated a sovereign debt crisis and a financial crisis.
And it is also obvious that Europe was not first resorting to the
supranational institutions and bodies to prevent the crisis and to
provide a rapid and efficient response once it had begun. The EU,
and particularly the EMU, need to improve their economic gover-
nance in at least three areas: fiscal, financial and economic inte-
gration. Below we shall analyse each of these aspects and the cha-
llenges faced in each by the EMU.

4.1. Changes in fiscal governance

In regard to fiscal integration, over recent months important
inroads have been made, among which are the Stability,
Coordination and Governance Treaty and the creation of the
European Stability Mechanism (ESM). The new Treaty, which shall
come into force on 1 January 2013, has been signed by all EU coun-
tries except for the United Kingdom and the Czech Republic, and
aims to make public finances sustainable and prevent the onset of
excessive public deficits, in order to safeguard the stability of the
Eurozone as a whole. In fact, this Treaty can be interpreted as a
second version of the Maastricht Treaty of 1992, with the differen-

42


ce that whereas the former determined the conditions to enter the
EMU, the new treaty can be said to detail the conditions to be met
by the members of the EMU to continue to belong to the Eurozone.
To this end, the Treaty introduces specific rules (the structural defi-
cit may not exceed 0.5% of the GDP, as of a date to be determined
by the European Commission, and a public debt below 60% of
GDP) and automatic mechanisms which enable the adoption of
corrective actions in the event of deviation from targets.

The rules introduced by the Treaty are in general well designed.
When establishing an objective in terms of structural fiscal balance it
allows for the influence of automatic stabilisers, the minimum being
between 0.5% of structural deficit and the deficit limit of 3%.
However, a good design does not necessarily guarantee a good imple-
mentation, as was the case with the Stability and Growth Pact (SGP).
It is true that the new Treaty entails a criterion of “reverse majority”:
from now on the adoption of corrective or disciplinary mechanisms
proposed by the European Commission must be rejected by a majo-
rity, whereas in the SGP the majority needed to be reached in order
to approve such proposals. It is also the experience of the current debt
crisis has led to an accumulation of collective knowledge which shall
prove very useful when adopting the right decisions in the future to
prevent new crises of this kind. Just as eighty years later the Federal
Reserve is currently preventing some of the well-known mistakes
which were made during the Great Depression of the 1930s, the
European Commission and the European Council shall endeavour to
prevent imbalances similar to those we are currently undergoing.

43


Available empirical and theoretical literature (see, for instance,
Andrés & Doménech, 2006, and the references included in this
paper), indicates that use of fiscal rules has proven useful in the
containment of public debt and the deficit, without the effective-
ness of the automatic stabilisers adversely affecting the effective-
ness of the discretionary fiscal policies. Therefore, the fiscal rules
like those included in the Stability Treaty do not have to be an
impediment for the fiscal policy to carry out its duty of stabilisa-
tion of economic cycles. Quite the opposite: when the economic
agents know, that as a consequence of the existence of such rules,
expansive fiscal policies in the short term shall be offset in the
medium term by counter-adjustment measures in order to prevent
the accumulation of public debt, the effectiveness of these discre-
tionary stabilisation policies increases, as has been proven by
Corsetti, Meier and Müller (2011).

In any event, it shall be very difficult to achieve an optimal
implementation of the Treaty. In the first place, because all govern-
ments are often too complacent when allocating probabilities to
possible risk scenarios which may render public finances unsustai-
nable. Secondly, because it is difficult that sanctions may come
about from the European Union Court of Justice on the basis of fai-
lure to meet the structural deficit targets, which depend of estima-
tes of the cyclical position of the economies and the elasticity of
public income and expenses to this cyclical position. Nevertheless,
what the Stability Treaty does provide is that, prior to reaching
sanctions, the Commission may exert much greater pressure on

44


national governments and alert markets about excessive imbalan-
ces, so that it is the markets themselves that impose discipline via
higher interest rates.

As for the ESM, at the ECOFIN on 30 March the decision was
taken to extend it to 500 thousand million euros, which shall be
provided over two years, and beginning on 1 July 2012. The extent
to which this fund will be sufficient is still unknown, in that it
shall depend on how it is used and whether it allows for fund leve-
raging. Without leveraging, the fund shall only be enough to cover
the financing needs of small or medium sized economies in the
EMU, but not of the big four. However, it may prove effective for
specific, selective but highly intensive interventions designed to
reduce risk premiums, that is, to replace the ECB in its Securities
Market Programme (SMP). In addition, if the ESM should obtain
liquidity from the ECB itself, each of these entities might be able to
separately specialise in the management of a risk: the SMP would
manage the ‘solvency risk’ of sovereign debt and the ECB would
managed the ‘liquidity risk’, thus enabling the central bank to resu-
me the natural role for which it was created, as it would be creating
an EU fund, with a joint and several guarantee, instead of sove-
reign debt with a national guarantee.

It is very important that the intervention of the SMP is as effi-
cient as possible. To this end, the Commission must be clear about
which countries are solvent, with adoption of any necessary adjust-
ment measures and structural reforms, and which countries need

45


some kind of debt restructuring. In the first case, which is clearly
applicable to countries such as Spain and Italy, SMP intervention
on risk premiums should be as intense as necessary until market
doubt and uncertainty have been obliterated. It would otherwise
be very difficult to convince sovereign, pension or investment
funds to purchase the public debt of such countries if Europe is not
the first to refrain from doing so.

Obviously, a more decisive intervention by the SMP, which
would lead to a rapid relaxation of the European sovereign debt
markets, requires the adoption and follow-up of the necessary
adjustments and reforms, but with sufficient time frame so as not
to asphyxiate the economic growth of the countries adopting such
policies. Specifically, the EU could change the fiscal consolidation
strategy which is currently being demanded from member states.
The obsession for nominal deficit targets should be replaced by a
more plausible, rigorous multi-annual fiscal policy strategy which,
in seeking to prevent a spiralling negative growth, truly contribu-
tes towards supporting sustainability in the long term of the public
finances of all countries. Specifically, the European consolidation
strategy should be based on the following principles:

1. Deficit reduction targets should refer to structural deficit inste-
ad of nominal deficit, as proposed by the new Stability Treaty.
This implies that countries should be asked to take specific and
detailed measures to ensure a certain amount ex ante in terms
of reduction in expenditure or increase in income in the

46


coming years. If, as a result of such measures, the economic
activity should be adversely affect with an impact on nominal
deficit (by the mere intervention of the automatic stabilisers),
the member states should not be obliged to take new savings
measures in that same financial year.

2. The pace of structural consolidation should be ambitious
enough to ensure sustainability in the medium to long term of
public finances, and gradual enough to prevent excessively
adverse effects on activity and employment in the short term.

3. The long term balance of public finances requires reforms
which guarantee the sustainability of public systems of pen-
sions and social protection.

Blanchard (2011) recently recommended that, in order to return to
prudent levels of public debt, it would be advisable to apply the pro-
verb of “slow and steady wins the race”. A similar recommendation to
that of De Long and Summers (2012), for whom a fiscal consolidation
which is too intense and too fast might endanger the very sustainabi-
lity of public finances instead of guaranteeing it.

In regard to the debate on Eurobonds, although not necessary
or sufficient, these can indeed become a useful tool in the con-
text of streamlined national finances. They are not necessary, as
the Eurozone can operate without them, if the Stability Treaty
and the mechanism for the prevention and correction of excessi-

47


ve imbalances work properly. And they are not sufficient to pre-
vent debt crises if the fiscal or current account imbalances are not
corrected. If growth is imbalanced (private indebtedness, current
account balance deficit), they imply a permanent transfer of
income from one country to another, which is unsustainable in
the long term. But they are convenient as an efficient mechanism
to ensure and pool risks in the face of asymmetric shocks and,
above all, as an element of political legitimacy of the European
project: European citizens must see that there are specific bene-
fits to belonging to the EMU. And Eurobonds are one of these
benefits, particularly now when many countries need to make
considerable sacrifices and carry out adjustments and reforms.

In this regard, the Eurobond proposal (blue and red) of Delpla
and von Weizsäcker (2010), has the advantage that it would allow
countries to benefit from risk pooling and the creation of a more
liquid asset (the blue bond) than that of the debt of each of the
EMU members, which would strengthen the euro as an internatio-
nal reserve currency, but with the benefit of preserving market dis-
cipline for national debt issued over and above 60% of GDP (red
bonds).5 This proposal consists of the EMU countries pooling their

5 Attinasi, Checherita and Nickel (2009) believe that this market discipline is behind
the increase in sovereign spreads between 2007 and 2009, as a result of the increase in
risk aversion and the concern for the sustainability of public finances. However, Favero
and Misale (2012) believe that this market discipline acts in an interrupted fashion over
time and, occasionally, in an exaggerated way, which in fact justifies the issue of euro-
bonds.

48


public debt up to 60% of their GDP as senior debt under the joint
and several responsibility of all members, whereas the issue of
national debt beyond such a limit would be junior debt under indi-
vidual responsibility. From this perspective, it is easy to conclude
that the decision of the European Council reached in December
2010 to ensure the solvency of the debt issued until June 2013, but
not that issued as of that date was a mistake, as the decision should
have been the opposite: ensure as of a given date all debt issued
under 60%, which would in effective terms be equal to the creation
of the Eurobonds proposed by Delpla and von Weizsäcker (2010).

4.2. Financial integration

As Pisany-Ferri and Sapir (2010) have pointed out, to date the
EMU has worked without a European institution able to rescue
transnational financial entities and without authentic European
stress tests for its banking institutions. Oversight duties have
remained with national authorities and coordination problems
have been managed by means of a combination of discretionary
cooperation and dependence on rules approved by the EU.

One of the lessons to be learned from the current crisis is that
it is difficult to manage a financial crisis on a European scale wit-
hout supranational regulators, supervisors and insurance mecha-
nisms. A large part of the head start that the US has over Europe
in terms of crisis management and resolution is precisely due to
the non-existence or the delay in creating such bodies. The US has

49


federal institutions to manage banking crises, whereas Europe
does not, which renders true the saying that banks are internatio-
nal when expanding and national upon demise. The problem is
that, for some governments (Ireland is a perfect example of this),
banks are too large in relation to their public budgets.

Likewise, the US has a federal regulation, whereas Europe has
enormous national dispersion of its regulations, despite the
efforts of the European Commission and regulators to homoge-
nise and converge towards a common financial regulation.
Occasionally, headways made in certain rules give rise to inequa-
lities among the agents who intervene in the markets, due to
other rules continuing to be different. This was the case, for ins-
tance, of the requirement of the European Banking Authority
that potentially systemic banks must exceed a capital ratio of 9%
before 30 June 2012, when the measurement of risk weighted
assets is regulated by different rules.

Banking oversight in Europe is furthermore carried out via
national supervisors instead of via a single European institution,
which introduces heterogeneity in oversight levels of the financial
system. The result of this financial fragmentation is that one can-
not speak of a single market, which generates the possibility of
regulatory arbitrage, different conditions of competency, ineffi-
ciencies and, in general, a disadvantage in regard to other world
financial areas.

50


In summary, financial integration requires an improvement to be
made in the mechanisms through which information is shared on
the financial systems of each country and the way in which their
activities are supervised, the harmonisation of the guarantees on
bank deposits and of consumer protection regulations, the creation
of European bank restructuring and rescue mechanisms, and the
advancement towards a Single Market not with more, but with a bet-
ter, European regulation which, instead of adding to and prevailing
over national legislation, should simplify and replace it.

4.3. Economic integration

With greater fiscal and financial integration the Eurozone could
operate with less tension in the future, without ensuring the economic
convergence among countries. Is convergence of income or welfare
levels in European countries necessary? Probably not, but it is still con-
venient, as has been stated earlier, to enable societies to believe that
being within an economic and monetary union has advantages well
beyond those which are provided by monetary stability. One of les-
sons to be learned from the Eurozone crisis is precisely that monetary
integration does not ensure economic convergence, as this requires an
advancement in convergence of the determining factors (economic,
social and institutional) of economic growth.

Table 4 shows that the differences in medium and long term
determinants of per capita income are very significant. The relati-
ve position of each country has been obtained on the basis of the

51


IMF analysis (2010), whereas the allocation of each country to one
of three groups under consideration has been carried out on the
basis of the criteria put forward by Hall and Soskice (2001). On the
basis of a number of criteria, both institutional and based on the
workings of economic relations, Hall and Soskice classify the varie-
ties of capitalism into liberal economies (the US being the pro-
totype) and coordinated economics (Scandinavian countries are
the paradigm). In both models (either with high or minimum
coordination), the economies can function efficiently. Market eco-
nomies which cannot be classified into either group are classified
as mixed economies.

In order to transform the qualitative IMF indicator into a quan-
titative one, such as analysing its correlation with per capita inco-
me, values of 1 to 3 have been allocated for each of the three levels
considered by the IMF, where a higher score suggests a greater need
for implementing structural reforms. This enables the obtention of
an average for each country and for each of the nine indicators
which are shown in Table 4. The differences shown in this table are
very marked, not only between developed economies, but also bet-
ween European ones. In light of this evidence it is not surprising
that, except in the case of Ireland, the countries which have accu-
mulated the most imbalances and which are suffering more form
the tensions in the debt market are precisely those which shown
greater structural weaknesses and the ones which must implement
the most reforms. Countries which in turn have been classified as
mixed market economies, presenting more inefficient institutions.

52

Table 4
Structural capacity of the developed economies

Source: BBVA Research (2010) based on IMF (2010) and Hall & Soskice (2010)

53


The changes in the regulations which affect the operation of the
labour, goods and services markets, trade, telecommunications
markets, are easier to implement in the short term, although the
changes thereof are felt in the medium term. An example of this
can be found in the recent reform of the labour market in Spain,
which is bringing its operation in line with that of countries like
Germany (in terms of internal flexibility mechanisms) or to that of
free market economies (by prioritising company agreements and
opt out clauses for collective bargaining agreements). Making
headway in these types of reforms (for example, linking salaries to
productivity) is crucial to remove the differences in competitive-
ness which exist between EMU countries, particularly bearing in
mind that the crisis may have had an effect on the potential
growth of these economies (see, for example, the European
Commission analysis, 2009).

However, in long term indicators such changes can take a lot
longer and, in some cases, even decades. This is the case with
human capital. Even in the event that the many younger workers
of countries such as Spain, Italy, Greece or Portugal should enter
into the labour market with the same human capital as in better
placed countries, 25 years would be needed to half the distance for
the whole of the population of employable age.

54


5.Conclusions

The economic crisis has highlighted the excessive complacency
of the markets, agents, supranational institutions and governments
when interpreting the imbalances which were being generated in
the previous expansion period and the absence of supranational
institutions and mechanisms, firstly to prevent the imbalances
which led to the crisis and secondly, to provide a fast and efficient
response once they had happened. Such institutions and mecha-
nisms are necessary because the evidence shows that the markets
react in a discontinuous way, and occasionally in an exaggerated
way, are pro-cyclical and do not generate of their own accord suf-
ficient disciplinary mechanisms in the short and medium term
whenever these are needed. Insofar as the current Eurozone crisis
has taken place mainly in three areas (debt crisis, banking crisis
and crisis in growth and competitiveness, with huge heterogeneity
between countries), the EU and, particularly the EMU, need to
improve their economic governance in at least three areas: the fis-
cal, the financial and that of economic integration.

As for the improvement in fiscal governance, the Treaty of
Stability, Coordination and Governance needs to be effectively
applies in a preventive way and that, during its transition towards
medium and long term structural deficit targets, this is done with
sufficient rigor and the right flexibility to prevent that countries
required to make the most efforts in the short term should enter
into a negative growth spiral. In this regard, intervention by the

55


ESM on risk premiums should be as intense as necessary until
market doubts and uncertainty have been removed, so that the
countries which are implementing fiscal adjustments and structu-
ral reforms have a sufficiently broad time period to enable such
measures to have positive effects on economic growth. As for the
Eurobonds, although they are not necessary or sufficient to ensu-
re the operation of the EMU, they are indeed convenient as an
efficient mechanism providing assurance and pooling risk in the
face of asymmetrical shocks and, above all, as a political legiti-
macy item in the European project: European citizens must disco-
ver that there are specific benefits to being part of the EMU.
Although it is difficult for such Eurobonds to become a viable ins-
trument in the current situation of divergence, they must become
an essential part of the future European Treasury when the main
imbalances are well under way to being corrected through the
decisive application of the reforms in the various countries in the
EU.

The second area where headway must be made is that of finan-
cial integration, in order to prevent future banking crises and to
manage them in a more efficient and rapid way. Europe must have
supranational financial institutions, regulators and supervisors, as
the current financial fragmentation prevents us from speaking of a
single market. An important limitation which gives rise the regu-
latory arbitrage, different competency conditions, inefficiencies
and, in general, a disadvantage in regard to other world financial
areas competing against the European entities.

56


Lastly, although greater fiscal and financial integration may suf-
fice to enable the Eurozone to operate with less tension in the futu-
re, it is worth establishing the bases for greater economic conver-
gence among its members, in order to increase the political legiti-
macy of the economic and monetary union project, with benefits
which go beyond those provided by economic stability. The diffe-
rences between the EMU countries in the workings of factor, goods
and services markets are very significant, as well as in long term
growth determinants. The structural reforms undertaken to enable
the markets to work more efficiently can bring positive effects in a
relatively reasonable period of time, enabling competitiveness to
improve and the imbalances accumulated during the expansion
and the crisis to disappear more rapidly. In this regard, it is essen-
tial to ensure the success of the Excessive Imbalances Procedure
and other imbalance monitoring mechanisms, ensuring a more
efficient preventive and corrective action than that provided by
the Stability and Growth Pact. However, in terms of long term
growth determinants, such changes can take longer and, in some
cases, even decades; it shall therefore be necessary for Europe to
boost the solidarity mechanisms required to accelerate this conver-
gence process in a more effective and efficient way than that done
in the past.

To simultaneous progress on all these fronts, both at suprana-
tional and national levels, is a necessary condition for the Euro to
overcome this crisis and for its members to continue to form part
of this project in the future. Insofar as the starting point is very

57


different in each country, the main challenge now facing the
EMU is to combine in a fair way the rigor and the ambition of the
adjustments and structural reforms, on the one hand, with an
appropriate time frame and solidarity with all other members of
the Eurozone, on the other.

If, on the contrary, the member states should fail to show such
determination, any attempt towards European economic gover-
nance will be due more an intention than a hard reality. The
Eurozone would have an uncertain future. The alternative of a
Political European Union, in which all necessary economic policies
could be implemented from a community Executive under the
control of a European Parliament and with all democratic rights, is
currently not expected for the time being.

Bibliography

- Attinasi M. G., C. Checherita y C. Nickel (2009): “What Explains
the Surge in Eurozone Sovereign Spreads during the Financial Crisis
of 2007-09?”, ECB Working Paper no. 1131/2009.

- Barro, R. J., N. G. Mankiw y X. Sala-i-Martin (1995): “Capital
Mobility in Neoclassical Models of Growth”. The American
Economic Review, 85(1), 103-115.

58


- BBVA Research (2010): Spain Economic Watch. Noviembre.

- Bean, Ch. (2004): “Asset Prices, Financial Instability, and
Monetary Policy”. The American Economic Review, 94(2), 14-18.

- Bean, Ch. (2010): “The Great Moderation, the Great Panic and
the Great Contraction”.

- Bi, H. (2012): “Sovereign Default Risk Premia, Fiscal Limits, and
Fiscal Policy”. European Economic Review, 56 (2012) 389–410.

- Blanchard, O. y F. Giavazzi (2002): “Current account deficits in
the euro area: the end of the Feldstein-Horioka puzzle?” Brookings
Papers on Economic Activity, 147-186.

- Blanchard, O. (2011): “Blanchard on 2011’s Four Hard Truths”.
Vox EU.

- Bordo, M. y O. Jeanne (2002): “Monetary Policy and Asset Prices:
Does 'Benign Neglect' Make Sense?” International Finance, 5(2), 139-
64.

- Borio, C. y W. White (2004): “Whiter monetary and financial sta-
bility? the implicatios of evolving policy regimes”. BIS Working
Papers No 147.

59


- Cecchetti, S., M. Mohanty y F. Zampolli (2010): “The Future of
Public Debt: Prospects and Implications”. BIS Working Paper No.
300.

- Comisión Europea (2009): "Impact of the Current Economic and
Financial Crisis on Potential Output". European Economy
Occasional Papers, 49.

- Comisión Europea (2012): First Alert Mechanism Report.

- Corsetti, G., A. Meier y G. J. Müller (2011): “Fiscal stimulus with
spending reversals“. The Review of Economics and Statistics (en prensa).
- DeLong, J. B. and L. H. Summers (2012): “Fiscal Policy in a
Depressed Economy”. Mimeo.

- Delpla, J. y J. von Weizsäcker (2010): “The Blue Bond Proposal”.
Bruegel Policy Brief.

- Doménech, R. y M. Jiménez (2010): ”La Primera Gran Crisis de la
Unión Económica y Monetaria”, Pensamiento Iberoamericano, 6, 49-
80.

- Edwards, S., 2002. "Does the Current Account Matter?," en
Sebastian Edwards y Jeffrey A. Frankel, eds, Preventing Currency
Crises in Emerging Markets, pages 21-76 NBER.

60


- Ehrmann, M., M. Fratzscher, R.S. Gurkaynak y E.T. Swanson
(2011). ‘Convergence and Anchoring of the Yield Curves in the
Euro Area’, The Review of Economics and Statistics, 93(1), 350–64.

- Favero, C. y A. Missale (2012): “Sovereign Spreads in the
Eurozone: Which Prospects for a Eurobond?” Economic Policy,
27(70), 231–273.

- FMI (2010), “Regional Economic Outlook. Europe”.

- Galí, J. y L. Gambetti (2009): "On the Sources of the Great
Moderation." American Economic Journal: Macroeconomics, 1(1):
26–57.
- Hall, Peter A. y David Soskice, 2001a: An Introduction to Varieties
of Capitalism. In: Peter A. Hall y David Soskice (eds.), Varieties of
Capitalism: The Institutional Foundations of Comparative Advantage.
Oxford: Oxford University Press, 1–70.

- Florence J. y P. Sodsriwiboon (2010): “Current Account
Imbalances in the Southern Euro Area”. WP/10/139. IMF.

- Lane, P. (2010): A European Perspective on External Imbalances.
Swedish Institue for European Policy Studies. Report nº 5.

- Leeper, E. M. y T. B. Walker (2011): “Fiscal Limits in Advanced
Economies”. Working Paper 16819. NBER.

61


- Obstfeld, M. (2012): “Does The Current Account Still Matter?”
Working Paper 17877. NBER.

- Pisani-Ferry, J. y A. Sapir (2010): "Banking crisis management in
the EU: an early assessment". Economic Policy, 341-373.

- Rojan, R. (2005): “Has Financial Development Made The World
Riskier?”. NBER WP 11728.

- Reinhart, C. M. y K. Rogoff (2008): “Is the 2007 US Sub-Prime
Financial Crisis So Different? An International Historical
Comparison”. American Economic Review, 98(2), 339–344.

- Reinhart, C. M. y K. Rogoff (2009): This Time is Different: Eight
Centuries of Financial Folly. Princeton University Press.

- Shambaugh, J. C. (2012): “The Euro’s Three Crises”. Brookings
Papers on Economic Activity (de próxima publicación).

62

The future of the Euro after the Great Recession by Javier Andrés and Rafel Domenech

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Viewers also liked

Viewers also liked (6)

Similar to The future of the Euro after the Great Recession by Javier Andrés and Rafel Domenech

Similar to The future of the Euro after the Great Recession by Javier Andrés and Rafel Domenech (20)

More from Círculo de Empresarios

More from Círculo de Empresarios (20)

Recently uploaded

Recently uploaded (20)

The future of the Euro after the Great Recession by Javier Andrés and Rafel Domenech