A Bridge to Somewhere
By Michael Drexler*
Short-term political considerations have been hindering Europe’s ability to resolve the worst fiscal crisis in its history. Although the multitude of solutions have been proposed, they all often fail to offer a long-term vision for sustainable future of the Eurozone – thus building a “bridge to nowhere”. Restoring confidence in the future of the Eurozone has become of paramount importance, and this task will be achieved only by a clear set of short and medium term measures.
As the details of the current rescue package are being finalized, it is not too late to remind policy-makers that a new policy package should offer a vision for the sustainable future of the Eurozone. Such a comprehensive strategy was developed by members of the Global Agenda Council on Fiscal Crises at the recent Summit on the Global Agenda in Abu Dhabi.
This strategy paper is a result of discussions among experts from several Councils, including those on Europe, International Monetary System, Systemic Financial Risk, Banking and Capital Markets, and Institutional Governance Systems. Experts from private and public sectors, research institutions and think tanks united around one goal – coming up with a plan to put the Eurozone on a fiscally sustainable footing.
The resulting plan outlines a pragmatic set of solutions that would help overcome political bottlenecks and ensure fiscal stability in Europe. These solutions require making clear steps towards reforming Eurozone economic governance, and ensuring fiscal stability in the future. Not surprising, it would require delegating fiscal authority to the level of the Eurozone and other measures.
How and when it should be done is described in “A Bridge to Somewhere: Building a compehensive strategy for resolving the Eurozone debt crisis”, by Jeromin Zettelmeyer, Vice-Chair of the Global Agenda Council on Fiscal Crises. In such a critical time for Europe, these suggestions provide European policy-makers with valuable food for thought.
*Michael Drexler is Senior Director, Head of Investory Industries at the World Economic Forum.
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