{"id":18259,"date":"2014-07-08T06:42:14","date_gmt":"2014-07-08T04:42:14","guid":{"rendered":"http:\/\/www.w-t-w.org\/en\/?p=18259"},"modified":"2014-07-08T06:45:32","modified_gmt":"2014-07-08T04:45:32","slug":"european-debt","status":"publish","type":"post","link":"https:\/\/www.w-t-w.org\/en\/european-debt\/","title":{"rendered":"European Debt"},"content":{"rendered":"

Kenneth Rogoff writes:<\/a><\/p>\n

Eurozone leaders continue to debate how best to reinvigorate economic growth, with French and Italian leaders now arguing that the eurozone\u2019s rigid \u201cfiscal compact\u201d should be loosened. Meanwhile, the leaders of the eurozone\u2019s northern member countries continue to push for more serious implementation of structural reform.<\/p>\n

Ideally, both sides will get their way, but it is difficult to see an endgame that does not involve significant debt restructuring or rescheduling. The inability of Europe\u2019s politicians to contemplate this scenario is placing a huge burden on the European Central Bank.<\/p>\n

In general, neither pure austerity nor crude Keynesian stimulus can help countries escape high-debt traps. Throughout history, other measures, including debt rescheduling, inflation, and various forms of wealth taxation (such as financial repression), have typically played a significant role.<\/p>\n

It is hard to see how European countries can indefinitely avoid recourse to the full debt toolkit, especially to repair the fragile economies of the eurozone\u2019s periphery. The ECB\u2019s expansive \u201cwhatever it takes\u201d guarantee may indeed be enough to help finance greater short-term stimulus than is currently being allowed; but the ECB\u2019s guarantee will not solve long-run sustainability problems. \u00a0European Debt<\/a><\/strong><\/p>\n

\"European<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Kenneth Rogoff writes: Eurozone leaders continue to debate how best to reinvigorate economic growth, with French and Italian leaders now arguing that the eurozone\u2019s rigid \u201cfiscal compact\u201d should be loosened. Meanwhile, the leaders of the eurozone\u2019s northern member countries continue … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":22,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[13],"tags":[],"class_list":["post-18259","post","type-post","status-publish","format-standard","hentry","category-finance"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t