European integration efforts are on the brink of collapse. In its current state, the European Monetary Union is unintentionally acting more as a dis-integration factor than as a unifying element. Dirk Meyer provides descriptions, analyses and background information on the current crisis. The book is the result of more than ten years of work on the subject.
Author(s): Dirk Meyer
Publisher: Springer
Year: 2022
Language: English
Pages: 322
City: Wiesbaden
Preface and Acknowledgments
Contents
About the Author
List of Abbreviations
List of Figures
1 Introduction
Part I Does European Integration Fail—Despite or Because of the Alternatives?
2 The Politics of Inevitability: How It Came About and Why a Change Is Advised
2.1 High Error Costs through Inevitability
2.2 Loss of Democracy and Legal Uncertainties
2.3 Summary
References
3 The Refugee and Euro Crises: Similarities and Differences in Political Handling
3.1 Obvious Similarities
3.2 Different Problem-solving Strategies
3.3 Explanatory Approaches for Different Handling
3.4 De Facto Breach of EU Law in Both Cases
3.5 The Rule of Law, Democracy and the Separation of Powers
3.5.1 The Rule of Law
3.5.2 Democracy
3.5.3 Shift in the Division of Power
3.6 Loss of the Ability to Err
3.7 Summary
References
Part II The crisis policy and its consequences
4 Low Interest Rates: Consequences and Dangers
4.1 The Facts: Negative Real Interest Rate
4.2 Effects of a Low Interest Rate
4.2.1 Real Asset Depletion – Declining Future Provision
4.2.2 Tax Enforcement Interest 6%
4.2.3 Investment Shortage
4.2.4 Debt Trap of Low Interest Rates
4.2.5 Risks to Financial Market Stability
4.2.6 Socialization of ECB Losses
4.2.7 Uncertainties in Occupational Pensions
4.2.8 Low Interest Rates Weaken Insurances
4.3 Need for Action?
4.4 Summary
References
5 Equalization of Risk Premiums through the ECB
5.1 Policy of Equalizing Risk Premiums
5.2 How Effective is this Policy?
5.3 Misdevelopments
5.4 Political Conclusions
5.5 Summary
References
6 Negative Returns on Corporate Bonds: How the ECB Renders the Interest Rate Steering Function of the Capital Market Ineffective
6.1 Money for Nothing
6.2 Purchase of Corporate Bonds: A last-ditch Effort?
6.3 The Economic Steering Function of the Bond Interest Rate …
6.4 … Leads to Misallocation with Negative Capital Market Interest Rates
6.5 Further Consequences and Implications
6.6 Summary
References
7 Will There Soon Be a Euro Parallel Currency?—On the Proposal for a Tax on Cash
7.1 Psychological Preparation for Negative Savings Rates or Serious Proposal?
7.2 Euro-Parallel Currency to Decouple Cash and Sight Deposits
7.3 Analysis and Criticism
7.4 Summary
References
8 The New Money Laundering Act: Another Attempt at Cash Restrictions
8.1 Stronger Regulation of Cash Transactions
8.2 Strengthening the Risk-based Approach of Money Laundering Law
8.3 Organizational and Institutional Innovations
8.4 Do Stricter Regulations of Money Transfers Lead to Less Crime?
8.5 Summary
References
9 Italian Bank Rescue: EU Resolution Directive and an “Italian Way”
9.1 Italian Banking Crisis 2016
9.2 Ways of Bank Restructuring and Liquidation
9.2.1 Single Resolution Mechanism (SRM)
9.2.2 Continued Pooling of Aid and Liability
9.3 Alternative Solutions to Italian Bank Rescue
9.3.1 The Italian Way of a Pooling of Aid and Liability
9.3.2 Future “creative” Possibilities for Bank Rescue
9.4 Assessment of the “Italian way” to Bank Rescue
9.5 Summary
References
10 Debt Relief for Greece: An Overview of Previous Reliefs
10.1 On the Debt Situation
10.2 The Debt Relief Between 2012 and 2017
10.2.1 Debt Haircut of Private Creditors in March 2012
10.2.2 Debt Haircut for Public Creditors (EFSF and Bilateral Loans) in November 2012
10.2.3 Structural Advantages of an EFSF/ESM Credit
10.2.4 Further Credit Easing by the EFSF/ESM from January 2017
10.3 Eurogroup Agreements on Further Debt Relief 2018
10.4 Estimation of the Total Benefit Between 2012 and 2017
10.5 Summary
References
Part III Monetary Policy: ANFA, ELA, TARGET2, PSPP and PEPP—Euro Money Creation by the Member States
Nationalized Monetary Policy: ANFA, ELA, TARGET2, PSPP and PEPP—Euro Money Creation by the Member States
11 ANFA: Euro Money Creation by the Member States
11.1 Emergency Liquidity Assistance (ELA)
11.2 Agreement on Net Financial Assets (ANFA)
11.3 TARGET2 balances
11.4 ELA, ANFA and TARGET2 Balances Compared
11.5 Actions
11.6 Summary
References
12 PSPP Bond Purchases as National Additional Money with Monetary Policy Relevance: A Reinterpretation of the ANFA Holdings in the Light of Recent Events
12.1 Reassessment of PSPP Purchases: Fiscal and Economic Policy Instead of Monetary Policy
12.2 PSPP Purchases as NFA: National Additional Money with Monetary Policy Relevance
12.3 Summary
References
13 The PSPP Government Bond Programme: Empirical Data and Rulebook Call the BVerfG Judgment Partly into Question
13.1 Subject of the Investigation and Course of the Legal Dispute
13.2 On the Proportionality of the PSPP Programme
13.3 Do the Criteria for the Prohibition of Monetary State Financing Hold?
13.3.1 Compliance with Purchase Limits
13.3.2 Compliance with the ECB Capital Key
13.4 Loss Sharing
13.5 Outlook on the Pandemic Emergency Purchase Programme
13.5.1 Analysis of the PEPP Programme for the Prohibition of Monetary State Financing
13.5.2 A Crisis Scenario for Greece, Italy and the EU
13.6 The PSPP (and PEPP) as a Crisis Instrument for State Credit Access: What Happens in the Event of Unwinding?
13.7 Summary
References
14 The TARGET2 System: Solutions from a Dead End
14.1 The TARGET Default Risk Creates a Blackmail Potential
14.2 Solutions without Reform of the TARGET Regulations?
14.3 Repatriation of TARGET2 Balances through Central Bank Bonds
14.4 Proposals for a TARGET Reform
14.4.1 Periodic Return of TARGET Credits to a Payment-Related Normal State
14.4.2 Capital Controls and Restrictions on Intraday TARGET Balances
14.5 Summary
References
Index
