Intereconomics - Review of European Economic Policy

Intereconomics - Review of European Economic Policy

Volume 47, July/August 2012

The July/August issue of Intereconomics is highlighted by a Forum which focuses on the challenges the Great Recession poses to the welfare state – both today and going forward. Two further articles offer separate novel proposals for resolving the ongoing sovereign debt crisis in Europe – the first via a new European Redemption Pact and the second via the creative Europeanisation of three economic areas. This issue’s Editorial provides an overview of the troubles plaguing the Spanish financial sector and an outline of the path forward.


Featured Topic

Additional Highlights from the Current Issue

Quote of the Month


The Welfare State After the Great Recession

The economic crisis has given rise to significant challenges to the welfare state. Given that welfare expenses account for a large proportion of all state spending in the member countries of the European Union, reducing government spending means cutting welfare measures. Yet social protection, in particular unemployment insurance benefits and minimum income support, has significantly softened the impact of the crisis for millions of individuals. The authors in this issue’s Forum scrutinise the financial viability of current programmes and debate whether the crisis is inappropriately being used by some as an opportunity to roll back the welfare state permanently.


The European Redemption Pact: Implementation and Macroeconomic Effects

Hasan Doluca, Malte Hübner, Dominik Rumpf and Benjamin Weigert (German Council of Economic Experts) propose a European Redemption Pact (ERP) as a possible solution to the sovereign debt crisis. The ERP would provide sustainable financing conditions for participating countries to help bring their public debt ratios below 60% within the next 20 to 25 years. The authors describe one possible way of implementing the ERP and analyse the fiscal effects of participating in the Pact.

A Modest Proposal for Resolving the Eurozone Crisis

Yanis Varoufakis (University of Athens and University of Texas) and Stuart Holland (Coimbra University) present three simple policies for overcoming the eurozone crisis that can be implemented immediately and require none of the unpopular moves such as national guarantees, fiscal transfers or moves towards federation that entail Treaty changes. The logic behind these policy proposals is juxtaposed with the false dilemmas that currently impede clear thinking and immobilise Europe’s policymakers.

Bilateral Current Account Rebalancing in the EMU

Following the financial crisis, German current account surpluses with Italy, Spain, Portugal and Greece have decreased. Georg Dettmann (University of London and University of Verona), Jochen Möbert (Deutsche Bank Research) and Christian Weistroffer (Deutsche Bank Research) show that rebalancing has been achieved mainly at the expense of domestic demand in these countries. Moreover, although all four peripheral countries have achieved some rebalancing of their current accounts vis-à-vis Germany, the path of adjustment differs.

Current Issue of Intereconomics Online


Policymakers have attributed the debt crisis to the financial crisis, downplaying the role of policy failures to consolidate in good times and address sustainability problems arising from changing demographics.

from Torben M. Andersen's Forum article The Welfare State and the Great Recession

About Intereconomics - Review of European Economic Policy

Intereconomics is jointly produced by ZBW - Leibniz Information Centre for Economics and the Centre for European Policy Studies (CEPS). The journal appears bimonthly and features papers by economists that deal with economic and social policy issues and trends in Europe or affecting Europe. To submit a paper for publication, please visit the Call for Papers section of our website for relevant information.

Intereconomics is published by Springer-Verlag Berlin Heidelberg.

Newsletter Subscription

To unsubscribe from the newsletter, please visit the following web page, enter your email address, and click "unsubscribe":

To change your email address, please unsubscribe as explained above and then resubscribe using your new address.

Editorial Office

Redaktion Intereconomics
ZBW - Leibniz Information Centre for Economics
Neuer Jungfernstieg 21
20354 Hamburg, Germany

Phone: +49 (0)40 42834-306/307
Fax: +49 (0)40 42834-262


Centre for European Policy Studies (CEPS)
Place du Congrès 1
1000 Brussels, Belgium

Phone: +32 (0)2 229 39 11
Fax: +32 (0)2 219 41 51


Derek Kruse
Telefon: +49 (0)40 42834-412

Christine Klein
Telefon: +49 (0)40 42834-334