Sovereignty, exchange rate and the Euro crisis

• Autor(a) principal: Bresser-Pereira, Luiz Carlos
• Data de Publicação: 2014
• Outros Autores: Rossi, Pedro
• Tipo de documento: Artigo
• Idioma: eng
• Título da fonte: Repositório Institucional do FGV (FGV Repositório Digital)
• Texto Completo: http://hdl.handle.net/10438/12264
• topic: Exchange rate; Euro crisis; Sovereignty; Economia; Economia

This paper presents an interpretation of the European crisis based on the balance of payments imbalances within the Eurozone and highlighting the role of the 'internal' real exchange rates as a primary cause of the crisis. It explores the structural contradictions that turn the Euro into a 'foreign currency' for each individual Eurozone country. These contradictions imply the inability of national central banks to monetize the public and private debts, which makes the Euro crisis a sovereign crisis similar to those typical of emerging countries, but whose solution presents additional obstacles.