[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-0-en-105":3,"doc-seo-266069-105":59,"doc-detail-266069-en":130},{"code":4,"msg":5,"data":6},0,"success",[7,13,18,23,28,33,38,43,48,51,55],{"id":8,"doc_module":4,"doc_module_name":9,"category_name":10,"show_sort_weight":11,"slug":12},1,"Document","Story & Novel",90,"story-novel",{"id":14,"doc_module":4,"doc_module_name":9,"category_name":15,"show_sort_weight":16,"slug":17},2,"Literature",80,"literature",{"id":19,"doc_module":4,"doc_module_name":9,"category_name":20,"show_sort_weight":21,"slug":22},4,"Exam",70,"exam",{"id":24,"doc_module":4,"doc_module_name":9,"category_name":25,"show_sort_weight":26,"slug":27},5,"Comic",60,"comic",{"id":29,"doc_module":4,"doc_module_name":9,"category_name":30,"show_sort_weight":31,"slug":32},6,"Technology",50,"technology",{"id":34,"doc_module":4,"doc_module_name":9,"category_name":35,"show_sort_weight":36,"slug":37},7,"Healthcare",40,"healthcare",{"id":39,"doc_module":4,"doc_module_name":9,"category_name":40,"show_sort_weight":41,"slug":42},8,"Research & Report",30,"research-report",{"id":44,"doc_module":4,"doc_module_name":9,"category_name":45,"show_sort_weight":46,"slug":47},9,"Religion & Spirituality",20,"religion-spirituality",{"id":46,"doc_module":4,"doc_module_name":9,"category_name":49,"show_sort_weight":46,"slug":50},"World Cup","world-cup",{"id":52,"doc_module":4,"doc_module_name":9,"category_name":53,"show_sort_weight":52,"slug":54},10,"Lifestyle","lifestyle",{"id":56,"doc_module":4,"doc_module_name":9,"category_name":57,"show_sort_weight":24,"slug":58},19,"General","general",{"code":4,"msg":60,"data":61},"ok",{"site_id":62,"language":63,"slug":64,"title":65,"keywords":66,"description":67,"schema_data":68,"social_meta":123,"head_meta":125,"extra_data":127,"updated_unix":129},105,"en","the-euro-crisis-causes-and-solutions-discussion-paper","The Euro Crisis - Causes and Solutions - Discussion Paper","","A debate-focused paper argues that the euro crisis was avoidable and rooted in systemic design and policy failures in the European Monetary Union, later worsened by misdiagnosis and mismanagement. It outlines a conditional Lender of Last Resort for sovereign borrowers to prevent default, contrasts the ESM’s fragility with a workable mechanism using ECB-backed liquidity. It also proposes banking union supervision, limits on bailouts, and macroeconomic policies combining differentiated inflation targeting with greater fiscal expansion and pan-European investment.",{"@graph":69,"@context":122},[70,84,105],{"@type":71,"itemListElement":72},"BreadcrumbList",[73,77,79,82],{"item":74,"name":75,"@type":76,"position":8},"https://docshare.wps.com","Home","ListItem",{"item":78,"name":9,"@type":76,"position":14},"https://docshare.wps.com/document/",{"item":80,"name":40,"@type":76,"position":81},"https://docshare.wps.com/document/research-report/",3,{"item":83,"name":65,"@type":76,"position":19},"https://docshare.wps.com/document/the-euro-crisis-causes-and-solutions-discussion-paper/266069/",{"url":83,"name":65,"@type":85,"image":86,"author":91,"headline":65,"publisher":94,"fileFormat":97,"inLanguage":63,"description":67,"dateModified":98,"datePublished":99,"encodingFormat":97,"isAccessibleForFree":100,"interactionStatistic":101},"DigitalDocument",{"url":87,"@type":88,"width":89,"height":90},"https://docshare.wps.com/thumbnails/the-euro-crisis-causes-and-solutions-discussion-paper/266069.png","ImageObject",300,407,{"name":92,"@type":93},"Putri","Person",{"url":74,"name":95,"@type":96},"DocShare","Organization","application/pdf","2026-11-03","2026-09-14",true,{"@type":102,"interactionType":103,"userInteractionCount":46},"InteractionCounter",{"@type":104},"ViewAction",{"@type":106,"mainEntity":107},"FAQPage",[108,114,118],{"name":109,"@type":110,"acceptedAnswer":111},"Why does the paper say the euro crisis was avoidable?","Question",{"text":112,"@type":113},"It attributes the crisis to self-inflicted systemic policy failures in how the European Monetary Union was designed, constructed, and implemented, and to leadership mismanagement. It also criticizes the framing of the crisis as primarily fiscal discipline rather than a system design problem.","Answer",{"name":115,"@type":110,"acceptedAnswer":116},"What solution does the paper propose to reduce the risk of sovereign default?",{"text":117,"@type":113},"It calls for establishing a conditional Lender of Last Resort model for sovereign borrowers. The proposal uses a structured backstop via the ESM conditionality, where pricing varies by member-state fiscal actions to incentivize sustainable policies.",{"name":119,"@type":110,"acceptedAnswer":120},"What reforms does the paper recommend for Eurozone banking?",{"text":121,"@type":113},"It argues for a single central authority for bank supervision, regulation, and resolution, implemented through a banking union. It also proposes creating a European Deposit Insurance Corporation to underwrite deposits and handle closure, winding-up, and deposit transfers for insolvent banks, aiming to end bank runs and future bailout funding.","https://schema.org",{"og:url":83,"og:type":124,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":126,"canonical":83},"index,follow",{"doc_id":128,"site_id":62},266069,1789403524,{"code":4,"msg":5,"data":131},{"doc_id":128,"user_id":132,"nickname":92,"user_avatar":133,"doc_module":4,"category_id":39,"category_name":40,"doc_title":65,"doc_description":67,"doc_content":134,"file_id":135,"file_url":136,"file_type":137,"file_size":138,"view_count":46,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":46,"language":139,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":140,"faqs":141,"seo_title":142,"seo_description":67,"update_tm":129,"read_time":31,"preview_page_count":4},962085571259,"https://ap-avatar.wpscdn.com/davatar_29158cc5080c5b710cf443261637dec0","Discussion Paper  \nJuly 2012  \nThe Euro Crisis:  \nCauses and Solutions  \nTom McDonnell  \nTASC discussion papers are intended as a contribution to debate. They are not refereed. Readers are invited to submit comments to the author.  \nThe Euro Crisis: Causes and Solutions  \nTom McDonnell 1  \nTASC Discussion Paper, July 2012  \nKey Points  \n1. The euro crisis was avoidable. It is a self inflicted crisis and the consequence of systemic policy failures in the way European Monetary Union (EMU) was designed, constructed and implemented. The severity of the crisis has itself been greatly exacerbated by the profound mismanagement of Eurozone leaders and by its misdiagnosis as a crisis of fiscal discipline, where, Greece apart, it is really a system crisis with its roots in the design flaws of the currency union itself. It appears that policymakers have failed to learn the lessons of the Great Depression of the 1930s and the long Japanese stagnation of the 1990s. The current responses to the crisis to date have been insufficient and in some cases even counterproductive.  \n2. The euro crisis is primarily a function of the inability of Eurozone member states to print their own currency. This inability means these countries can run out of money and are therefore exposed to insolvency risks. An essential component of crisis resolution is to eliminate the possibility of sovereign default by any member state exhibiting a demonstrated willingness to pursue sustainable fiscal policies. To achieve this goal a conditional Lender of Last Resort (LOLR) for sovereign borrowers must be established. The European Stability Mechanism (ESM), as designed, is not an LOLR and has an inherently fragile structure. Mutual debt issuance proposals such as most of the various Eurobond models come attached with substantial moral hazard risks. It is nevertheless possible to establish a conditional LOLR model for sovereign borrowers that minimises moral hazard risks and rewards fiscally sustainable policies. If the ESM is awarded a banking licence it would have the right to borrow from the European Central Bank (ECB) . The ESM could engage in purchases of government bonds using its first tranche of paid-in capital and then place these bonds as collateral with the ECB in order to maintain its own capital base. By providing conditional liquidity for sovereigns, and then obtaining its own liquidity from the ECB, the ESM would de facto function as an LOLR for sovereign borrowers. Crucially, the  \n1 Tom McDonnell can be contacted directly at [tmcdonnell@tascnet.ie](tmcdonnell@tascnet.ie)  \nDiscussion Paper  \n1  \nESM interest rate offered as a backstop before each future sovereign debt issuance would vary from member state to member state and would be calculated automatically using an agreed mathematical formula set annually by European policymakers. By incorporating the member states’ discretionary fiscal actions into this formula it becomes possible to incentivise fiscal prudence and accommodate moral hazard concerns.  \n3. Eurozone bank supervision, bank regulation and, where applicable, bank resolution, must be made the responsibility of a single central authority rather than national authorities. In other words, the Eurozone should establish a banking union to complement monetary union. The banking union should cover all private banks in the Eurozone and not just larger banks. While the ECB is best placed to perform this function in the short-run, a European Deposit Insurance Corporation (EDIC) funded primarily by the private credit institutions should be established in the short-to-medium-term to take over this responsibility. The ECB in the short-run, and subsequently the EDIC, could underwrite the deposits of all Eurozone banks and should be assigned the power to close down insolvent banks, resolve their winding-up, and transfer deposits to a solvent institution. The ECB would continue to provide guaranteed liquidity support for solvent credit institutions. The goal","cbCaiuWkVDM47SNr","https://ap.wps.com/l/cbCaiuWkVDM47SNr","pdf",677539,"English","# Key Points\n## Avoidable systemic causes and misdiagnosis\n## Conditional lender of last resort for sovereigns\n## Banking union: supervision, resolution, and deposit insurance\n## Limits of austerity and the case for fiscal expansion","[{\"question\":\"Why does the paper say the euro crisis was avoidable?\",\"answer\":\"It attributes the crisis to self-inflicted systemic policy failures in how the European Monetary Union was designed, constructed, and implemented, and to leadership mismanagement. It also criticizes the framing of the crisis as primarily fiscal discipline rather than a system design problem.\"},{\"question\":\"What solution does the paper propose to reduce the risk of sovereign default?\",\"answer\":\"It calls for establishing a conditional Lender of Last Resort model for sovereign borrowers. The proposal uses a structured backstop via the ESM conditionality, where pricing varies by member-state fiscal actions to incentivize sustainable policies.\"},{\"question\":\"What reforms does the paper recommend for Eurozone banking?\",\"answer\":\"It argues for a single central authority for bank supervision, regulation, and resolution, implemented through a banking union. It also proposes creating a European Deposit Insurance Corporation to underwrite deposits and handle closure, winding-up, and deposit transfers for insolvent banks, aiming to end bank runs and future bailout funding.\"}]","The Euro Crisis - Causes and Solutions - Discussion Paper | PDF"]