analysis suggests that, given EMU's present political-economic set-up, i) the bail-out was unavoidable, ii) the lengthy process … with a future moral hazard problem. Based on our analysis, we suggest that the EMU's institutional design could be improved … processes as well as the conditions and parameters on which the scope and limits of fiscal redistribution in EMU depends. In …

analysis suggests that, given EMU's present political-economic set-up, i) the bail-out was unavoidable, ii) the lengthy process … with a future moral hazard problem. Based on our analysis, we suggest that the EMU's institutional design could be improved … negotiation processes as well as the conditions and parameters on which the scope and limits of fiscal redistribution in EMU …

) steady deterioration of Greek macroeconomic fundamentals over 2001-2009 to levels inconsistent with long-term EMU … participation; and (b) a double shift in markets' expectations, from a regime of credible commitment to future EMU participation … under an implicit EMU/German guarantee of Greek fiscal liabilities, to a regime of non-credible EMU commitment without …