The 2011 governance reform of the Eurozone: Two well-known problems of the centrally planned economies (An Essay)

Mihályi, P. (2011) The 2011 governance reform of the Eurozone: Two well-known problems of the centrally planned economies (An Essay). Acta Oeconomica, 61 (3). pp. 281-291. ISSN 0001-6373

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Abstract

The protracted sovereign debt crisis within the Eurozone has given rise to new policy questions. In a paradoxical way, the dilemmas confronting the contemporary EU/EMU reformers are similar to those which Socialist planners faced 30–40 years ago. This will be illustrated by two examples: the inherent contradictions of ex ante coordination, and the difficulties in hardening the soft budget constraint mechanism. Deep and far-reaching reforms are not possible without a consensus among those experts who have the ear of the elected leaders. This condition is not fulfilled today, due to the lack of consensus on the diagnosis.

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