Managing Risks in the European Periphery Debt Crisis - Lessons from the Trade-off between Economics, Politics and the Financial Markets

The European Periphery Debt Crisis (EPDC) has its roots primarily in the structural characteristics of the individual economies which are trading off with a number of European and international economic, regulatory, political, and financial market factors. The book is motivated by the prolonged crisis and the associated transmission of global shocks and spillover effects. The book offers a full diagnosis of the EPDC, its association with the national and international structural characteristics, and a full analysis from a risk management point of view of the available policy options, both retrospectively and prospectively. Its contributors are senior policymakers, regulators, active policy advisors, bankers, and decision makers in the markets, drawing experience from the peripheral European countries themselves, the European Union and other western economies. The book is a practical reference to all those involved in the decision-making process in banking, financial markets, investments, business, policy making, and regulation. It offers in-depth analysis and information to researchers in international organizations, think tanks and universities, as well as to postgraduate students in Economics and MBA courses.

PART I: GENESIS OF THE CRISIS, USE AND ABUSE OF ECONOMIC POLICIES 1. The Euro Zone Sovereign Debt Crisis (The genesis of the crisis?); Philippe D'Arvisenet 2. The Trade-Off between Fiscal and Competiveness Adjustments; Daniel Gros with Cinzia Alcidi 3. Ireland and Greece: A Tale of Two Fiscal Adjustments; Jeffrey D. Anderson and Jessica Stallings 4. Rating Agencies vs. Sovereign Debt Markets: A Tale of Interacting Risk Preferences; George Christodoulakis 5. The 2012 Greek Debt Restructuring and its Aftermath; Miranda Xafa 6. Economic Theories that Influenced the Judges of Karlsruhe; Paul De Grauwe 7. Privatization of State Assets in the Presence of Crisis; George Christodoulakis PART II: CRISIS RESOLUTION, PROSPECT AND RETROSPECT 8. How to Manage Public Debts in the Euro Area?; Catherine Mathieu and Henri Sterdyniak 9. A Transfer Mechanism as a Stabilization Tool in the EMU; Kerstin Bernoth and Philipp Engler 10. Sovereign Debt and its Restructuring Framework in the Eurozone; Ashoka Mody 11. Funding Risks for Corporates in the Periphery: Disintermediation to the Rescue for the Larger Ones, Challenges for the Others; Blaise Ganguin 12. On Solving Europe's Financial Issues to Promote Sustainable Growth; Adrian Blundell-Wignall and Caroline Roulet 13. European Banking Union as a Response to the Fragmentation of the Internal Market Resulting from the Financial and Sovereign Debt Crisis; Dimitris Tsibanoulis with Gerry Kounadis