A number of tools have been suggested for solving the European sovereign debt crisis, in particular the options of leveraging the EFSF/ESM, introducing Eurobonds and a European Troubled Asset Relief Programme (Euro-TARP). However, it is unclear how these instruments will work, given jittery...

This paper presents three simple policies for overcoming the crisis that can be implemented immediately and require none of the moves such as national guarantees or fiscal transfers to which many Europeans are opposed, nor moves towards federation that entail Treaty changes, which electorates...

Rising debt levels have caused a revival of financial repression in the euro area and the USA. The Federal Reserve directly represses US bond yields and assists in financing the state budget, resulting in an overall liquidation effect from falling bond yields of about three per cent of total...

This paper reviews the novel policy measures developed by the EU to deal with insolvent member states and assesses their impact on Greece's political economy. Greece represents a major test case as a recipient of two bailout loans plus debt relief from private creditors. The paper examines the...

The Swiss debt brake served as a model for the new German budget rule. The two tools share the long-term goal of rendering fiscal policy sustainable by stabilising nominal debt as well as the short-term goal of smoothing the economic cycle. Debt brakes thus act as an automatic stabiliser within...

Since the onset of the sovereign debt crisis, the crisis-stricken countries in Europe have been pushed to take drastic steps to consolidate their finances and reduce their budget deficits. Despite strong public opposition and largely damaging short-run effects, the countries have undertaken many...