An article summarizing my thinking on a number of euro area issues in the newly founded Berlin Policy Journal.
The genie has again slipped out of the bottle: Europe is again discussing the possibility of Greece leaving the euro. Policymakers are once again debating whether this would be helpful or not for Greece, whether there could be contagion to other euro area countries, and what all of this means for the governance of the euro area. A more general discussion on the future of the Economic and Monetary Union is warranted, and is officially being pursued in the European Council. It will need to address three major issues: financial and banking fragilities, competitiveness divergences between member states, and the euro area’s inadequate fiscal governance. ….