Sinn the euro trap; on busting bubbles, budgets, and beliefs (2014)

‘In this trenchant analysis of Europe’s recent economic experience, Hans-Werner Sinn conducts a post-mortem for the Euro as an ambitious political gambit that has failed to overcome bad incentives and missing institutions His forensic investigation uncovers staggering fiscal commitments that have been made through the conduct of monetary policy and without the explicit recognition or approval of those on whom the burdens will fall Sinn issues a call to action, making a compelling case that the most important obstacle on the path to European stability and prosperity is a system that is illogical and unsustainable This excellent book virtually compels a response from those who would substitute hope for facts in their defense of the Euro and its prospects.’ Alan J Auerbach, Professor of Economics and Law, University of California, Berkeley ‘Hans-Werner Sinn has written an exceptional book on the euro crisis—rich in substance and yet understandable for the layman It is to be hoped that it not only will be read, but taken to heart by politicians.’ Ernst Baltensperger, Professor Emeritus of Macroeconomics, University of Bern ‘Hans-Werner Sinn offers an outstandingly clear overview of the perils posed by excessive sovereign debt and by the divergence in competitiveness across the EU The steep increase in the credit that the southern countries have received from the ECB and the corresponding risk brought upon the assets of the stable members are rightly emphasised.’ Peter Bernholz, Professor Emeritus of Public Finance, University of Basel ‘Hans-Werner Sinn has emerged as the most prolific and profound economist in Germany, writing on the euro and indeed much else This book is a tour de force.’ Jagdish N Bhagwati, Professor of Economics, Law and International Affairs, Columbia University, and author of In Defense of Globalization ‘I was riveted With this book, Sinn has finally written his masterpiece It is so well written that even non-economists can easily understand it It jolts you up without ever veering into hyperbole.’ Friedrich Breyer, Professor of Economics and Public Policy, University of Konstanz ‘Professor Sinn has again enlightened and provoked us, and offered strong policy medicine In his view, the southern tier should temporarily exit the Eurozone, devalue, and establish fiscal order with clear financial and public balance sheets, hence regaining competitiveness A ‘new’ EU—restructured as a federal state with a US-type financial system, tight fiscal constraints on the states, a new ‘target balance’ settlement system, and interregionally-neutral monetary policy—would then welcome them back on new terms This model is contrasted with Sinn’s view of existing policy—forced huge north-to-south capital transfers (‘debt mutualization’) and a printing-press central bank—which he believes has resulted in recurrent bubbles, the acceptance of southern tier non-competitiveness, and a history of ‘stumbling from crisis to crisis’ Sinn lays out all of the relevant issues, and in the process teaches us how Europe got into this pickle Complex puzzles are solved, myths exposed, and the arcane explained in non-technical terms While others will surely disagree with this analytical and historical perspective, they must now deal with Sinn’s clear delineation of the relevant issues and explain how they weight and interpret these issues differently All readers will gain perspective and learn much from Sinn’s timely effort The book is a ‘must-read’ for all who are interested in thinking through the web of difficult questions now facing Europe; I highly recommend it.’ Robert Haveman, Professor Emeritus of Economics and Public Affairs, University of WisconsinMadison ‘Hans-Werner Sinn is a master at presenting research findings understandably and yet accurately to a wider readership An important book!’ Stefan Homburg, Professor of Public Finance, University of Hannover ‘In his masterly analysis Hans-Werner Sinn unravels the tangled tale of the Euro crisis with remarkable patience, wisdom and clarity His painstaking analysis makes it clear that the Eurosystem is unsustainable without major reforms, and his bold recommendations for how to carry out those reforms deserve to be taken seriously by everyone.’ Peter W Howitt, Professor Emeritus of Social Sciences, Brown University ‘Hans-Werner Sinn once again brilliantly manages to explain complex interactions in easily understandable terms to deliver an important message.’ Otmar Issing, Professor of Economics, Money and International Economic Relations, University of Frankfurt, and former ECB Chief Economist ‘Sinn offers a sobering look back combined with a realistic list of options going forward A ‘must-read’ for anyone who wants to know where Europe is headed and what it would take to save the euro.’ Anil K Kashyap, Professor of Economics and Finance, University of Chicago ‘Sinn’s forthright acceptance that those who opposed Germany’s adoption of the Euro were right after all, sets the toughminded and honest tone of this provocative book, which offers penetrating analysis of what went wrong—and right—with the system as well as how—and how not—it might be repaired It is required reading for all who worry about Europe’s future.’ David Laidler, Professor Emeritus of Economics, University of Western Ontario ‘ The Euro Trap merits a wide audience The book has many strengths It is detailed, but easily read It recognizes and agrees that a driving force behind the euro is political—to strengthen Europe and prevent future wars, so the euro must be strengthened, not abandoned Most of all, it is honest in showing that the long euro crisis is not just a financial crisis, as many want us to believe Differences in costs of production across Europe prevent recovery Sinn concludes that to restore competitiveness in the indebted countries these countries should exit the euro temporarily and depreciate The author recognizes that making that adjustment will not be costless or simple, but it is necessary and sufficient to restore growth.’ Allan H Meltzer, Professor of Political Economy, Carnegie Mellon University, and Distinguished Visiting Fellow, the Hoover Institution, Stanford University ‘Hans-Werner Sinn offers a clear, comprehensive analysis of the euro ‘rescues’ He shows how politicians get mired ever more deeply in the assumption of liabilities at taxpayers’ expense, although it is already clear that a large portion of the credits granted will never be repaid A gripping book for those who not blindly swallow political pronouncements, but want to understand what is actually going on A must-read for our political representatives, so that they understand what they are doing.’ Manfred J M Neumann, Professor Emeritus and Director of the Institute for International Economy, University of Bonn ‘ The Euro Trap is a brave and brilliant analysis of the quagmire that the Eurozone has fallen into Hans-Werner Sinn’s lucid and lively description of the monetary transfers from north to south, and his proposed exit strategies, must be studied carefully by citizens and policymakers in Europe and around the world.’ William D Nordhaus, Professor of Economics, Yale University ‘Hans-Werner Sinn has produced perhaps the most important scholarly book on the euro in at least a decade, one that should be read carefully by all sides of the debate His aim is to provide balanced objective insights, not to offer polemic support or criticism Sinn’s basic thesis is that only by making the euro system more transparent and more democratic can its potentially very bright future be ensured.’ Kenneth S Rogoff, Professor of Economics and Public Policy, Harvard University ‘ The great financial machine is still running, but Hans-Werner Sinn puts me in mind of an exacting, careful engineer who has detected a design flaw deep in its works that had been overlooked by everyone else This is the book of this discovery and it is so thrilling and so full of disquieting detail that I read it in one sitting.’ Frank Schirrmacher, Co-Editor of the Frankfurter Allgemeine Zeitung ‘Hans-Werner Sinn’s ‘Euro Trap’ starkly lays out the fundamental weaknesses of the Eurosystem The book does not limit itself to pointing out the mistaken approach of the euro rescue policies; it also proposes new strategies to attain long-term stability for the currency union.’ Helmut Schlesinger, former President of the German Bundesbank ‘With his customary energy and directness, Hans-Werner Sinn in this important book rethinks the origins of the current dangerous weakness in the Eurozone, and considers possible repairs He sees through the immediate financial complexity to the deeper underlying problems that have to be resolved One of these is that in a monetary union without a common fiscal policy the central bank is driven to de facto fiscal actions Another is that the peripheral countries suffer not merely from an overhang of debt but from a lasting need for real devaluation, with the loss of income it entails Not everyone will agree with the remedies Sinn proposes, but then he forces them, if they are serious, to come up with genuine alternatives Sinn is a heavyweight.’ Robert M Solow, Professor Emeritus of Economics, Massachusetts Institute of Technology ‘ The book offers a comprehensive view of the European balance-of-payments crisis and the associated competitiveness crisis that haunts southern Europe, basing its analysis on a rich body of indisputable, but so far little or only partially known, empirical facts This important work lifts a veil from before our eyes.’ Erich W Streissler, Professor Emeritus of Economics, University of Vienna ‘Hans-Werner Sinn describes what is wrong with the Eurozone in its current form, and that bold reforms are needed This book is an important contribution to the Eurozone debate, and a must-read for everyone who wishes to participate in it.’ Harald Uhlig, Professor in Economics, University of Chicago THE EURO TRAP THE EURO TRAP ON BURSTING BUBBLES , BUDGETS , AND BELIEFS HANS-WERNER SINN Great Clarendon Street, Oxford, OX2 6DP, United Kingdom Oxford University Press is a department of the University of Oxford It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide Oxford is a registered trade mark of Oxford University Press in the UK and in certain other countries © Hans-Werner Sinn 2014 The moral rights of the author​ have been asserted First Edition published in 2014 Impression: All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, by licence, or under terms agreed with the appropriate reprographics rights organization Enquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above You must not circulate this work in any other form and you must impose this same condition on any acquirer Published in the United States of America by Oxford University Press 198 Madison Avenue, New York, NY 10016, United States of America British Library Cataloguing in Publication Data Data available Library of Congress Control Number: 2014934190 ISBN 978–0–19–870213–9 eISBN 978–0–19–102475–7 Links to third-party websites are provided by Oxford in good faith and for information only Oxford disclaims any responsibility for the materials contained in any third-party website referenced in this work All links used in this book were last accessed on 28 February 2014 unless otherwise noted For Meinhard Knoche ACKNOWLEDGEMENTS This book began as a translation by Julio Saavedra of my German book Die Target-Falle, which was published in 2012 by Carl Hanser Verlag, Munich While the translation of the original German text was excellent, my reworking of the English manuscript changed the structure of the book entirely So a new book emerged The English text has also been updated to include new policy topics that have come up since the German original went to press and addresses a wider audience with different interests After the refereeing processes, the book’s figures were updated a second time, most of them including now the full year 2013 I received skilled technical support from various people, above all Wolfgang Meister who helped with the statistics, Christoph Zeiner who constructed the graphs, and Julio Saavedra who edited the manuscript Anja Rohwer, Jakob Eberl, and Christopher Weber helped me to research the literature and performed various technical tasks Lisa Giani Contini, Paul Kremmel, Heidi Sherman, and Justin Tumlinson helped check my English Jennifer Hinchliffe converted the manuscript into OUP’s format I am very grateful for their careful assistance Jürgen Stark, Christoph Trebesch, and Timo Wollmershäuser read the entire manuscript and gave useful comments I also received helpful remarks on parts of the book by Philippine Cour-Thimann, Anil Kashyap, Harold James, David Laidler, and Frank Westermann I thank them all, as well many others who allowed me to draw from their wisdom, including Giuseppe Bertola, Beat Blankart, Michael Burda, Kai Carstensen, Giancarlo Corsetti, Paul De Grauwe, John Driffill, Achim Dübel, Klaus Engelen, Udo di Fabio, Martin Feldstein, Carl-Ludwig Holtfrerich, Otmar Issing, Wilhelm Kohler, Kai Konrad, William Levine, Georg Milbradt, Dietrich Murswiek, Manfred J M Neumann, Bernd Rudolph, Jan Scheithauer, Helmut Schlesinger, Gerlinde Sinn, Jan-Egbert Sturm, Jens Ulbrich, Akos Valentinyi, Xavier Vives, and Andreas Worms Finally, I would like to thank three anonymous referees consulted by the publisher for their useful comments and those who, after reading the book, gave OUP the right to publish their endorsements Munich, February 2014 CONTENTS List of Figures List of Tables Introduction: The Euro Crisis Wish and Reality Euro Dynamics The Euro and Peace Advantages of the Euro for Trade and Capital Flows The Path to a Currency Union The Price of German Reunification? Transfer and Debt Union The European Central Bank Bubbles in the Periphery Importing Capital The Disappearance of Interest Rate Spreads The Timing Problem Relief for Government Budgets The Lack of Fiscal Discipline Italy’s Missed Opportunity The Foreign Debt Problem Bubbles Property Prices Private Wealth Market or Government Failure? The Other Side of the Coin Euro Winners and Euro Losers Capital Exports from the Core to the Periphery Mass Unemployment in Germany Agenda 2010 The New Construction Boom Misunderstanding the Tango The Competitiveness Problem Why the Current Accounts Improved Dying Industries Too Expensive transmission 114 Primary Dealer Credit Facility 245; see also Federal Reserve printing press (definition) 147–152; see also money creation privatization 32, 342–343 profit share 97, 102 PSA Peugeot Citroën 111 Public Choice 312, 315 qualified majority 268, 274, 290, 355 rating: AAA 142 agency 77, 157–158, 177, 230, 261 investment grade 77, 153, 157, 159, 168, 247, 261, 309 junk status 156 minimum 153, 155–157, 159, 168–169; see also collateral non-investment grade 157, 247, 309 single A 153, 155–156, 158–159; see also ECB Harmonized Rating Scale triple B 153, 155–156, 158–159; see also ECB Harmonized Rating Scale real appreciation 114–122; see also inflation real effective exchange rate 116, 124–126 real depreciation 102, 113, 117–122, 125, 127, 129–130, 132, 137–140, 230, 253, 313, 343–344, 351, 353; see also deflation real estate boom 69–70 realignment 115–122, 126, 135–137, 221, 256, 313, 332–334, 336, 343–344, 348; see also price adjustment Real Madrid 160 red railway lantern 85; see also sick man of Europe re-entry into a currency union 349 referendum 8, 293 refinancing policy 151 regulation: bank 76, 320, 355; see also banking supervision competition 296, 355 competition in laxity 295, 355 system 78, 296, 355 Reichsmark 138 Renault 111 rent seeking 312, 315 reparation payments 339; see also Treaty of Versailles return option 347 revaluation 33, 37, 61–66, 108–109, 115–116, 122, 143, 149, 172, 214, 216 risk: assessment 41, 77, 142 bankruptcy 26, 74, 152 investment 3, 41, 296, 317 premium 41–46, 74, 76–78, 151, 174, 193, 199, 254–255, 312–314 redenomination 312–314 state default 276, 288 wealth 320; see also wealth risk-weighted asset 76, 306 Romania 69, 134–135, 145, 192, 211, 338 Rouble Zone 243 Russia 28, 87–88, 138, 182, 243, 302, 337–338 central bank; see Central Bank of Russia oligarch 302 President 28 Sachsen LB Europe 142; see also special purpose vehicle, Saxony state bank safe haven 143, 217, 229, 231, 238 Salomon Smith Barney 10 San Francisco Fed; see Federal Reserve Bank of San Francisco SAREB; see Sociedad de Gestión de Activos procedentes de la Reestructuración Bancaria Saudi Arabia 87–88 savings 40, 48, 52, 58–59, 67, 103–104, 109, 136, 151–153, 198, 234–235, 254–255, 266, 340 books 92 capital 90–91, 102, 208, 304 deposit 300–301 flow 87–97, 145, 149, 208, 230, 314 Saxony state bank 14 Scandinavia 138 Scientific Advisory Group of the German Ministry of Economics; see Economic Advisory Council to the Federal Ministry of Economics Seat 24, 34, 134, 320 Secondary Markets Support Facility (SMSF) 269, 289–290 Securities Markets Programme (SMP) 12, 157, 166, 178, 192, 212, 215–216, 218–219, 221, 232, 234, 257, 259–266, 270, 275–276, 281–282, 287, 316, 331, 356 seignorage 37, 148–149, 171, 173, 182–183, 245, 265–266, 277–279, 289, 310; see also interest revenue Serbia 135, 145, 337 settlement: mechanism 194, 256 of imbalances 241 procedure 246–247 sick man of Europe 95; see also red railway lantern Singapore 11 Single Resolution Board (SRB) 308, 338; see also banking union Single Resolution Fund (SRF) 303, 305–306, 340; see also banking union Single Resolution Mechanism (SRM) 302–306, 308; see also banking union Single Supervisory Mechanism (SSM) 294, 308; see also banking union Skoda 134 Slovakia 36, 43, 56, 62, 65–66, 72, 82, 87, 90, 95, 113, 116, 134–135, 191, 267, 333 Slovenia 36, 43, 56, 62, 65–66, 72, 86–87, 90, 95, 113, 116, 134–135, 191, 268, 333, 338 SMP; see Securities Markets Programme SMSF; see Secondary Market Support Facility Sociedad de Gestión de Activos procedentes de la Reestructuración Bancaria (SAREB) 58 Société Générale 94 Sohmen Lecture 98 solvency crisis 153; see also liquidity crisis Solvency II 78 SOMA; see System Open Market Account South Africa 11 sovereign default 79, 173, 230, 264, 288, 322–323, 337–338 Soviet Union 28, 243, 327, 358 Spain 2–3, 11–16, 19, 21, 24–25, 36, 38–40, 42–43, 46, 50–51, 54–58, 61–62, 64–65, 67–73, 76, 82–85, 87–88, 90, 93–95, 99, 106–107, 110–111, 113–114, 116, 119–120, 122, 124, 126, 128–129, 134–137, 139, 144–145, 160, 162, 188–189, 191–193, 196–197, 209, 213, 217, 221, 225–228, 231, 235–236, 252–253, 255, 260, 262, 264, 268, 270–273, 281, 284, 295–296, 298–299, 301, 311, 332–334, 336, 342–343, 347 central bank; see Banco de España government bond 91, 228, 263 inquisition 168 peseta 24, 27 Prime Minister 296 Saving Banks; see Cajas special purpose vehicle (SPV) 142 speculative attack 80, 252 SPV; see special purpose vehicle SRB; see Single Resolution Board SRF; see Single Resolution Fund SRM; see Single Resolution Mechanism SSM; see Single Supervisory Mechanism St Louis District Fed; see Federal Reserve Bank of St Louis Stability and Growth Pact 52–57, 80–81, 268, 320; see also Maastricht Treaty Standard & Poor’s 153, 157, 230; see also rating state insolvency; see sovereign default stealth bailout 177, 181, 201, 205, 208, 210, 259 STEP market; see Short-term European Paper market stress test 308–309 structured assets 92, 158, 230 subprime crisis 44, 92, 112, 258; see Lehman crisis Sub-Saharan Africa 11 subsidiarity principle 354 Suomen Pankki 206, 238 Swastika 16, 18 Sweden 26, 356 krona 27 Switzerland 71–72, 122–123, 222, 232, 264, 332–333, 335–336 Canton 286, 354, 358 central bank, see Swiss National Bank commercial bank 244 franc 25, 244 Swiss Confederation 8, 354 Swiss National Bank 244, 281, 286 Syriza 3, 17 System Open Market Account (SOMA) 245–248, 251, 330; see also clearing TAE; see Taxpayers Association of Europe Tajikistan 243 Taiwan 11 Target; see Trans-European Automated Real-time Gross Settlement Express Transfer System Taxpayers Association of Europe (TAE) 194, 274 Taylor rule 35 Tennessee 323 Term Auction Facility 245; see also Federal Reserve term deposit; see deposit Term Securities Lending Facility 245; see also Federal Reserve term to maturity 42, 65, 67, 153–155, 164, 174, 275–280, 304 TEU; see Treaty of the European Union TFEU; see Treaty on the Functioning of the European Union Thailand 346 trade: barter 243 imbalance 250 infrastructure 47 union 3, 137 Trans-European Automated Real-time Gross Settlement Express Transfer System (Target): balance 37, 92, 176–180, 188, 192–196, 204, 233, 246, 270 claim 91, 188–193, 196, 207, 211–215, 233–237, 276, 278–279 and current account; see current account and Target balances as international credit 5, 181, 194–196, 205–207, 210–212, 214–215, 218–221, 223–228, 272, 275, 316, 328 deficit 181–186, 220, 253, 329 liability 189–194, 196, 200, 203, 211–213, 220, 222–238, 247, 261, 270–272, 277, 279, 309, 331 risk 178, 277, 293 surplus 181, 220 transfer rouble; see also Rouble Zone transfer union 31, 167, 317, 358, see also fiscal union Treaty of the European Union (TEU) 35; see Maastricht Treaty Treaty of Versailles 29, 138, 344 Treaty on the Functioning of the European Union (TFEU) 20, 74, 136, 173, 255, 258–259, 262, 267, 273–274, 287–290, 292, 321, 354, 356 Treuhand 32, 54, 56; see also Germany reunification Troika 3, 17–18, 173, 273, 275, 342, 346, 349 Turkey 120–122, 135, 145, 148, 182, 279, 338, 350 UK; see United Kingdom ultra vires 287, 290 unemployment 2–4, 8, 10, 12–14, 16–18, 35, 70, 82, 94–97, 102, 105, 119, 122–123, 126–127, 129, 137–139, 149, 185, 228, 230, 258, 318, 332, 346, 348 Unemployment Benefit II 97; see also Agenda 2010 youth 2, 12–14 unions 3, 17, 123, 128, 136–137, 139, 229, 344, 347 United Kingdom (UK) 27, 34, 88, 93–94, 138, 145, 152, 230; see also Great Britain central bank; see Bank of England United States (US) 7–8, 19, 21, 30, 143, 185, 201, 245, 247, 319–322, 324–326, 353, 356–357, 359 Bankruptcy Code 326 central bank; see Federal Reserve dollar 242, 348 government 242, 325–326 monetary system 251, 327; see also Federal Reserve payment system 194, 246, 251, 329, 330–331 President 28, 267 Secretary of the Treasury 321 Treasury 239, 245, 247 Treasury Bills 239 United States of Europe 7–8, 21, 319–320, 353, 356, 359; see also fiscal union unit labor cost 123; see also labor cost University of Piraeus Unnim Banc 58 US; see United States US Council of Economic Advisors 22 value added tax (VAT) 52 VAT; see value added tax Verein für Socialpolitik 282 Vietnam 240, 243, 338 vocational training 13 Volkswagen 134 wage: cut 137, 139 hourly 134 low-wage competition 135 reduction 128, 132 restraint 90, 117, 123, 129, 132 rise 103, 114 War of Secession; see civil war wealth: levy 342–343 private 38, 72–74, 226, 298, 303, 340–342 Weimar Republic 138–139, 344 welfare state 139, 325 Wells Fargo 248 Werner Plan 26, 31 WestLB 305 World War 18–19, 28, 266 write-off: gain 65 loss 19, 44–45, 65, 69, 143, 166, 170–174, 230, 261–262, 266, 282, 292–295, 298–302, 305–306, 308–310, 315, 328, 339, 341, 344 X-Efficiency 312 AUTHOR AND EDITOR INDEX Abelshauser, W 139 Abraham, F 31 Acharya, V V 298 Admati, A 44, 296, 307 Advisory Council to the Federal Ministry of Economics and Technology 96 Aichele, R 101 Akerlof, G A 44, 74 Albul, B 307 Alcidi, C 253, 281, 311 Alesina, A 114 Alexander, R 18 Algemeen Dagblad online Alloway, T 163 American Bankruptcy Institute 326 Arrow, K 75 Asdrubali, P 185 Åslund, A 243 Asmussen, J 170, 312 Auer, R A 179, 220 Augstein, R 29 Badinger, H 35 Balázs, É 114 Baltensperger, E 295 Banca d’Italia 62, 68, 188, 200, 213, 229, 299 Banco de España 67, 188, 200, 229 Banco de Portugal 200 Bank for International Settlements (BIS) 21, 93, 94, 144, 231, 306 Bank of Finland 206, 207 Bankenverband–Bundesverband Deutscher Banken 20 Banque de France 164 Barclays Capital 263, 264 Barghini, T 326 Barker, A 305 Basel Committee on Banking Supervision 78 BBC News 111, 160, 302 BBC News Europe 17, 229 Beck, G 287 Beck, H 342 Beck, T 339 Bencek, D 332 Benito, A 120, 124, 333, 334 Bensel, N 96 Bérégovoy, P 15 Berger, H 345, 357 Bernanke, B S 201 Bernholz, P 178, 241, 263 Berschens, R 174 Berthold, N 263 Bindseil, U 178 Bini-Smaghi, L Blanchard, O 38, 114 Blankart, C B 167, 178, 238, 263 Blessing, K 240 Blinder, A S 143 Bloomberg 111, 112 Boadway, R 186 Borchardt, K 138 Bordo, M D 242, 322 Born, B 346 Börsch-Supan, A 263 Braasch, B 80 Braunberger, G 80 Brendel, M 162, 165 Brennan, G 312, 315 Brennan, J 163 Breyer, F 263 Brown, A J G 89 Brunsden, J 297 Buch, C M 294 Buchanan, J M 312, 315 Buchen, T 346 Buchheim, C 346 Buchheit, L 337 Buiter, W 37, 171, 290 BulwienGesa AG 99 Bundesagentur für Arbeit 97 Burda, M 242 Buti, M 28 Calvo, G A 49, 283 Canuto, O 326 Capodilupo, L 326 Carney, B 21 Carstensen, K 346 Cecchetti, S G 238 Central Bank of Cyprus 71, 170, 200 Central Bank of Greece 71, 170, 200 Central Bank of Ireland 170, 174, 200 Chantrill, C 325 Christie, R 297 Churchill, W 319 Citi Research 348 Cline, W R 319, 337 Comfort, N 309 Committee for the Study of Economic and Monetary Union 27 Constâncio, V 45, 255, 260, 280, 281, 288, 297, 314 Conway, P 243 Corden, N M 130, 318 Council of the European Union 52, 53, 105, 261, 267, 288, 294, 303, 307, 308 Courchene, T 31 Cour-Thimann, P 178, 179, 180, 189, 192, 248 CPB Netherlands Bureau for Economics Policy Analysis 110 Cruces, J 338 Dabilis, A 17 D’Alessio, G 73 Daly, K 120, 124, 333, 334 Darvas, Z 251, 252 Das, U S 337, 339 Dawes, C G 138 De Angelis, M 326 De Grauwe, P 74, 228, 252, 277, 283 De Nederlandsche Bank 188 De Pooter, M 263, 264 Demongeot, A 120, 124, 333, 334 Deutsche Bundesbank 24, 27, 69, 88, 91, 101, 146, 179, 188, 207, 233, 241, 242, 298, 299, 300, 301 Deutscher Bundestag 85 Dewatripont, M 79, 285 Di Cesare, A 313 di Fabio, U 287, 293 Diamond, P 75 Dokumente zur Deutschlandpolitik 29 Dolak, K 324, 325 Dolan, M 326 Dolls, M 186 Domar, E D 331 Dombrovskis, V 132 Dorfman, R 313 Dornbusch, R 48 Draghi, M 45, 118, 180, 252, 255, 260, 280, 281, 288, 289, 297, 314 Drèze, J 75 Drine, I 114 Dübel, H.-J 173 Dubey, P 75 Duffie, D 75 Dunstan, R 326 Eberl, J 154, 165 Eckert, D 349 Economic and Social Committee 80 Economist, The 31, 86, 106 Eekhoff, J 263 Eichengreen, B 11, 239, 351 Eijffinger, S 166, 314 ekathimerini.com 127 Engelen, K C 173 English, W B 323 Erbentraut, J 325 Ernst & Young 299 Eurogroup 275, 309 European Banking Authority (EBA) 340 European Central Bank (ECB) 4, 33, 36, 37, 45, 67, 71, 72, 73, 153, 154, 156, 157, 158, 159, 160, 161, 162, 163, 164, 165, 167, 168, 169, 170, 182, 189, 192, 194, 200, 204, 213, 216, 221, 263, 266, 280, 281, 288, 309 European Commission (EC) 31, 36, 39, 50, 53, 54, 55, 56, 59, 60, 69, 83, 84, 87, 101, 116, 124, 126, 213, 267, 268, 269, 272, 297, 301, 303, 304, 305, 306, 308, 333, 342 European Constitutional Group 357 European Council 53 European Economic Advisory Group (EEAG) 121, 248, 322, 323, 330, 339, 340, 354 European Financial Stability Facility (EFSF) 213, 234, 267 European Insurance and Occupational Pensions Authority (EIOPA) 78 European Mortgage Federation 67 European Parliament European Stability Mechanism (ESM) 213, 234 European Union (EU) 20, 29, 32, 136, 234, 268, 269, 287, 321, 354, 356 Eurostat 12, 13, 25, 39, 43, 49, 50, 53, 54, 55, 56, 58, 59, 60, 62, 68, 69, 83, 84, 87, 90, 95, 101, 107, 108, 109, 110, 113, 129, 131, 133, 135, 197, 213, 221, 242, 272, 311 Evans, L 299 Fahrholz, C 178 Federal Constitutional Court (German Constitutional Court or German Court) 18, 45, 265, 269, 290, 292, 293 Federal Ministry of Finance 268 Federal Reserve 246, 247 Federal Reserve Bank of New York 245 Feist, H 148, 183, 279 Felbermayr, G 101 Feldstein, M 22, 201, 262, 286, 331, 347 Ferguson, N 138 Fiedler, J 96 Fischer, H 96 Fischer, S 48 Fisher, I 139 Focus online 136 Frankfurter Allgemeine Zeitung (F.A.Z.) 22, 154 Franz, W 263 Fratzscher, M 282 Freytag, A 178 Friedman, A 10 Friedman, M 22, 139, 205, 344 Fuceri, D 31 Fuest, C 186, 263 Furth, J H 241 Gahlen, B 80 Galí, J 114 Gambacorta, R 73 Garber, P M 177 Gasse, P 96 Gauweiler, P 273 Geanakoplos, J 75 Geiger, H 80 German Council of Economic Experts 88, 96, 321 German Federal Statistical Office 54, 71, 98, 99, 134, 138, 242 Giavazzi, F 38, 114, 282 Giesbert, F.-O 29 Giovanni, A 281 Gluch, E 99 Goldberg, L S 243 González-Páramo, J M 118 Goodhart, C 31, 296 Goria, F 299 Governo Italiano 60 Grande, G 313 Granville, B 138 Graves, S 120, 124, 333, 334 Greek Ministry of Finance 168 Grimme, C 346 Grinath, A 323, 324 Gros, D 185, 253, 281, 311 Grossman, S J 75 Gstädtner, T 294 Guardian, The Gulati, M 338, 340 Gumpel, P 10 Gurley, J G 190 Hamilton, A 321 Handelsblatt 160, 230 Hansen, A 137, 345 Hart, O 74, 75 Hartz, P 96 Hasan, M 18 Hau, H 297 Heiland, I 101 Hellwig, M 44, 263, 296, 307 Henderson, D W 48 Henkel, H.-O 88 Henzler, H 10 Herbst, L 346 Heremans, D 31 Hesse, H 80 Heyde, P 138 Hildebrand, P 281 Hofmann, C 154 Höhler, G 299 Holboell Nielsen, L 120, 124, 333, 334 Holtfrerich, C.-L 241, 242 Holzner, C 89, 96 Homburg, S 178, 187, 210, 263, 269, 288 Hoogduin, L 166 Hormats, R D 240 Hughes-Hallett, A 345 Ickes, B W 243 Ifo Institute (Ifo) 54, 98, 184, 270, 291 Il Giornale 18 Ilardi, G 73 Instituto National de Estadística 115 International Monetary Fund (IMF) 11, 88, 188, 200, 206, 207, 213, 252, 284, 299, 332, 342 Jacobides, M 351 Jaffee, D M 307 Jahn, J 294 James, H 14, 239, 242, 245, 322, 323 Jann, W 96 Jay, J 321 Ji, Y 277, 283 Jolis, A 21 Jones, E 185 Jonung, L 322 Jost, S 162, 165 Juncker, J.-C 15 Kaletsky, A 19 Kemp, M C 75 Kenen, P B 243 Keynes, J M 137, 139 King, M 287 Kirchhof, P 287 Kleemann, M 346 Kloß, M 50 Kohl, H 15, 20, 27 Kohler, W 178, 238 Koll, R 10, 26, 38 König, P J 178 Konrad, K 263, 357 Koo, G 158 Kornai, J 6, 327 Kovács, K 251 Kraljic, P 96 Kroszner, R S 296 Krugman, P 135 Kuehnen, E 296 Kunkel-Weber, I 96 Kunz, A 262 Kydland, F E 320 Laaser, C.-F 332 Laidler, D 345 Lautenschläger, S 294 Lehmann, M 158, 299 Lehmann, R 50 Leibenstein, H 312 Lerner, A P 48 Lewis, M 163 Limbach, J 354 Lipponer, A 178 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Wish and Reality Euro Dynamics The Euro and Peace—Advantages of the Euro for Trade and Capital Flows The Path to a Currency Union The Price of German Reunification?—Transfer and Debt Union The European... Reality Euro Dynamics The Euro and Peace Advantages of the Euro for Trade and Capital Flows The Path to a Currency Union The Price of German Reunification? Transfer and Debt Union The European... Portugal under the slogan ‘To the devil with the Troika’, the Troika being the delegation of the International Monetary Fund, the European Central Bank, and the European Commission that reviews