Art
bepress.com
Home
My Account
All Journals
Contact Bepress
About Bepress
Subscriptions
Services
Reviews


Search All Publications
Find

Or search all bepress web pages: Search

We welcome your feedback. Please email your suggestions and ideas to us.
German Working Papers in Law and Economics
cover current_volume all_volumes submit_article

bealert

Volume 2012

AUTHOR:
Hans-Bernd Schäfer

TITLE:
The Sovereign Debt Crisis in Europe, Save Banks Not States

SUGGESTED CITATION:
Hans-Bernd Schäfer (2012) "The Sovereign Debt Crisis in Europe, Save Banks Not States", German Working Papers in Law and Economics: Vol. 2012: Article 1.
http://www.bepress.com/gwp/default/vol2012/iss1/art1


View the article (257 KB)
Notify a colleague about this paper
Get Acrobat Reader
Printing Tip: Select the option to 'print as image' in the Acrobat print dialog to ensure the article prints as it appears on screen.
Learn more...

ABSTRACT:

The European central bank is a bank of banks but not a bank of states. This reduces the capabilities of member states to finance deficits. The role of the central bank to cope with the debt crises is institutionally more limited than in most other Western countries. The European Stability Mechanism has not enough financial power to bail out all distressed countries in the Eurozone. Eurobonds could increase lending capacities but would require a change of the European treaty, which is not in sight. They violate the no bail out clause of Art.125 of the Treaty on the Functioning of the European Union. The policy option is therefore debt restructuring of distressed countries and a bailout of financial institutions to avoid conflagration. This option would also shift some of the burden to creditors outside the Eurozone rather than to shift all risk on the people in solvent countries within the Eurozone.


| HOME | MY ACCOUNT | TERMS OF SERVICE | COPYRIGHT | PRIVACY |
Copyright ©1999-2014 Berkeley Electronic Press™ All rights reserved.