№251. The Eurozone Debt Crisis: From its origins to a way forward
№251. The Eurozone Debt Crisis: From its origins to a way forward

Author(s): Diego Valiante
Subject(s): Economic policy, Government/Political systems, EU-Accession / EU-DEvelopment, Financial Markets, Fiscal Politics / Budgeting
Published by: CEPS Centre for European Policy Studies
Keywords: Eurozone Debt Crisis; Argentine crisis; monetary policy support and fiscal policy coordination;
Summary/Abstract: The Eurozone debt crisis has now reached a turning point. This paper argues for a more organised intervention by the ECB to stop contagion through the creation of a quantitative easing programme, coupled with a political agreement among member states on a more federalist budget for the Eurozone. The roots of this crisis and how institutions have repeated some of the mistakes of the Argentine crisis, both in 1998 and 2010, are considered in this Policy Brief. The author analyses the reasons why the ECB should start aquantitative easing programme to contain government bond yields, and shows that it can be done with limited impact on inflation targeting policies.

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