Following the Great Recession, eurozone countries have performed worse than even the currency union’s most pessimistic … critics had predicted. The paper identifies the strong fundamental flaws in the design of the eurozone and proposes a set of … reforms, both in the structure of the eurozone and current policies, which might enable the euro to work. It traces the flaws …

rise to uncertainty in the determination of the default probability. We show how this uncertainty can affect the estimation …