Debt levels in the eurozone have reached new record highs. The member countries have tried to cushion the economic … as well as with the hypothetical application of the new fiscal rule to eurozone economies from 2022 to 2026. Finally, we … take up the recent proposal by ESM economists to increase the permissible debt ratio from 60 to 100% of GDP in the eurozone. …

This paper argues that the Eurozone crisis stems from a risk management failure in the Eurosystem's design, and that … applying insurance theory is useful. We model risk neutral agents choosing portfolios of government bonds of n countries in a … monetary union and other assets. We firstly analyse a country's debt choice, assuming as a benchmark case that the no-bailout …

This paper examines fiscal policy without commitment and the effects of conditional bailout loans. The government … public debt never decreases in the long-run when bailout loans are available. …