Five years after the first tremors in Europe's banking system, what makes the crisis unique is the absence of a democratically accountable decision-making framework; there is an 'executive deficit' that compounds Europe's democratic deficit. The author argues that the only way to resolve the...

Europe’s banking system has been in a state of systemic fragility since 2007-08. The current phase is marked by a sequence of interactions between sovereign problems and banking problems, resulting in gradual contagion to more countriesand more asset classes. The banking and sovereign crises...

In a monetary union, national fiscal deficits are of limited help to counteract deep recessions; union-wide support is needed. A common euro-area budget (1) should provide a temporary but significant transfer of resources in case of large regional shocks, (2) would be an instrument to counteract...

The Blue Bond proposal, published in May 2010 (Bruegel Policy Brief 2010/03) suggests that sovereign debt in euro-area countries be split into two parts. The first part, the senior "Blue" tranche of up to 60 percent of GDP, would be pooled among participating countries and jointly and severally...