Financial engineering will not stabilise an unstable euro area

Without the basics in place, Financial engineering can only delay the inevitable.

Profs. Paul De Grauwe and Yuemei Ji on fin engg in Euro area:

One Response to “Financial engineering will not stabilise an unstable euro area”

  1. EugenR Says:

    Governments and central banks main task is to act as anti economic trend stimulators. In EU they still have to establish a proper instrument for this purpose. Today’s major threat to EU is from Italy, with it’s limited capacity to cope with their sovereign debt, that became a whole Eurpean problem. At the end European Central Bank will have to Europenize all the sovereign debts above Mastrich criteria level, otherwise the separate countries will have no tools to react to deflationary trends and situations. The price will be probably additional step towards whole Eurpean Central Bank and budget department. At the end if the corridor is the creation of direct taxation of all European citizens.

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