6 Mar 2019
The received wisdom on the euro zone is that it needs to become more tightly integrated to survive. To ensure the resilience of the monetary union, fiscal transfers to peripheral economies and risk-sharing via the mutual issuance of Eurobonds are necessary and perhaps inevitable. Princeton economist Ashoka Mody takes a different view.
Mody has first-hand knowledge of the inner workings of the euro zone; as a senior official at the International Monetary Fund, he designed Ireland’s financial rescue programme in 2010. In his new book, EuroTragedy: A Drama in Nine Acts, he tells the story of the crisis and argues the project of ever closer union is politically unworkable. Instead, he advocates a ‘decentralisation’ of the euro zone to see off future chaos and revitalise the European economy. He spoke to AIQ about his ideas.
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