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Reformation or exodus: Assessing the future of the Euro

Published online by Cambridge University Press:  01 January 2023

Martin Watts ,
Timothy Sharpe  and
James Juniper
Martin Watts*
Affiliation:
The University of Newcastle, Australia
Timothy Sharpe
Affiliation:
Nottingham Trent University, UK
James Juniper
Affiliation:
The University of Newcastle, Australia
*
Martin Watts, Centre of Full Employment and Equity and Newcastle Business School, The University of Newcastle, Callaghan, Newcastle, NSW 2308, Australia. Email: martin.watts@newcastle.edu.au
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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.

Keywords

E24E61F33H11European Monetary Unionfiscal and monetary policyGlobal Financial Crisissovereignty
Type
Articles
Information
The Economic and Labour Relations Review , Volume 25 , Issue 3: Special issue - Crisis, Austerity, Neoliberalism and alternatives , September 2014 , pp. 465 - 483
Copyright
© The Author(s) 2014

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