Title: A modest proposal for Europe: a two-part plan for overcoming the eurozone's crisis, redesigning its crumbling architecture, and reinvigorating the European Project

Authors: Yanis Varoufakis, Stuart Holland

Addresses: Faculty of Economic Sciences, University of Athens, 14 Evripidou Street, Athens 10559, Greece. ' Faculty of Economics, University of Coimbra, 3004-531 Coimbra, Portugal

Abstract: During 2010, each and every response by the Eurozone to the galloping sovereign debt crisis has been consistently underwhelming. Monthly European Union Summit pronouncements, which during the first half of 2010 were met with initial goodwill by the markets and commentators, quickly proved the harbinger of further deepening of the crisis. By the end of 2010, the markets did not even wait for the European Union|s leaders to conclude their monthly meetings before signalling another jump in yields and a further deterioration of the continent|s financial outlook. Eventually, it became clear to everyone that the European approach (of extending expensive loans to fiscally stricken sovereigns on condition of savage austerity) was deeply flawed. This article outlines the basis of a policy mix that would end the crisis without any substantial institutional changes. It is in this particular sense that this proposal is both practical and modest.

Keywords: eurozone; sovereign debt crisis; banking crisis; recession; eurobonds; financial crisis; Europe; European Union.

DOI: 10.1504/IJPEE.2011.041703

International Journal of Pluralism and Economics Education, 2011 Vol.2 No.2, pp.227 - 235

Published online: 29 Jan 2015 *

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