Agreement Needed on Liquidity Provision to Restore Confidence in the Eurozone

Centre for European Policy Working Paper No. 258

7 Pages Posted: 1 Feb 2012

See all articles by Stefano Micossi

Stefano Micossi

Associazione italiana delle società per azioni

Date Written: November 30, 2011

Abstract

The multiple attempts to restore confidence in the eurozone over the 18 months that have passed since the first Greek rescue in May 2010, have clearly failed. Indeed, following each round of emergency measures agreed by the eurozone summits, matters have turned for the worse. This contribution by Stefano Micossi exhorts the leaders of the eurozone to go back to the drawing board and overcome their political disagreements on how to proceed. Arguing that straitened policies in all the member states will not suffice, he insists on the need for an adequate provision of liquidity – as large as needed in order to stop the ongoing currency run. If this cannot be agreed upon, Micossi warns that the eurozone will break down, with gigantic economic dislocations.

Keywords: eurozone, confidence, liquidity

Suggested Citation

Micossi, Stefano, Agreement Needed on Liquidity Provision to Restore Confidence in the Eurozone (November 30, 2011). Centre for European Policy Working Paper No. 258, Available at SSRN: https://ssrn.com/abstract=1996431 or http://dx.doi.org/10.2139/ssrn.1996431

Stefano Micossi (Contact Author)

Associazione italiana delle società per azioni ( email )

Piazza Venezia 11
ROMA, 00187
Italy
+39 06 69529214 (Phone)

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