Yanis Varoufakis’s research while affiliated with Athens State University and other places

A Modest Proposition to Overcome the Euro Crisis Europe faces a triple crisis: in its banks, in its sovereign debts and in its investments. Trusting the Nation-States to deal with these crises can only deepen inequalities and lead to European disintegration. Europe provides financial and banking institutions which can intervene in respect of national sovereignty, while paving the way towards common progress. This article provides a detailed roadmap to these institutions.

http://dx.doi.org/10.14195/2183‑203X_41_1

Contributors: Dean Baker, Víctor A. Beker, David Colander, Edward Fullbrook, James Galbraith, Jayati Ghosh, Claude Hillinger, Merijn Knibbe, Richard Parker, Heikki Patomäki, Ann Pettifor, Alicia Puyana, Lars Pålsson Syll, Geoff Tily, Yannis Varoufakis, Robert Wade

The ‘Juncker Plan’ of November 2014 proposes to define investment criteria for a European Fund for Strategic Investments. This displaces that such investments are within the statutory remit of the EIF – the European Investment Fund – which is part of the European Investment Bank Group and, like the EIB, can issue bonds that do not count on national debt. The BRICS are ready to invest in € bonds to promote European recovery since this is to mutual advantage in sustaining their trade. Rating agencies, pension funds and sovereign wealth funds want a European recovery. Nor are new investment criteria needed. They already were widely defined for the EIB Group by the 1994 Essen Council and in the 1997 Amsterdam Special Action Programme. A host of investment projects that already have planning approval can be jointly EIB-EIF financed and could achieve a Roosevelt style New Deal for Europe.http://dx.doi.org/10.14195/2183‑203X_41_2

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.