Article

 

Financial crisis, euro perspectives and the Balkans (p.17-35)

by

Ansgar Belke, University of Duisburg-Essen and DIW Berlin

Keywords : EU governance, European Council, European Financial Stability Facility, European Monetary Fund, policy coordination, Scoreboard, Stability and Growth Pact

JEL classification : E61, E62, F55, P48

Abstract

After having pointed to the large-scale problems of the status quo related to the euro area financial and debt crisis we describe the current crisis management framework and assess what its consequences and institutional follow-ups are. We then look at the implications of the latter for the Balkans: do they imply trouble for the Balkan EU perspective? We also briefly sketch what needs to be done in institutional terms in order to prevent future crises. The main part of the paper is devoted to an assessment of the seminal proposal of a European Monetary Fund. We derive that it is a preferable blueprint in our context. We finally convey an outlook on different issues: first on the still open and critical issues in euro area crisis management, second on the interaction of bank and sovereign debt resolution and, finally, also on the future economic performance of the Balkans, i.e. Croatia, Macedonia joint with Turkey, with an eye on the post-crisis era. We point out that the latter will be closely intertwined with the problem solution capacity in the euro area.