A New Start for the Eurozone: Dealing with Debt

Giancarlo Corsetti, Lars Feld, Philip Lane, Lucrezia Reichlin, Hélène Rey, Dimitri Vayanos, Beatrice Weder di Mauro 15 April 2015



Table of Contents

About the Authors   

Executive Summary  


1.    With high debt, the Eurozone remains vulnerable   

2.    Dealing with the legacy sovereign debt   

3.    Reforming the crisis lending framework    

4.    Diversification of sovereign risk and a safe asset    



Appendix A: Calibration of national debt buyback from seigniorage   
Appendix B: Calculation of the haircut for GDP bonds   


Pierre Werner Chair, European University Institute

Director, Walter Eucken Institute; Professor of Economic Policy, University of Freiburg

Governor, Central Bank of Ireland; Whately Professor of Political Economy, Trinity College Dublin (on leave); CEPR Research Fellow

Professor of Economics, London Business School; CEPR Research Fellow and trustee; IFRS Foundation trustee (chair steering committee sustainability reporting); Fellow of the British Academy; Fellow of the Econometric Society

Lord Bagri Professor of Economics, London Business School and CEPR Vice President and Research Fellow

Professor of Finance and Director, Paul Woolley Centre for the Study of Capital Market Dysfunctionality, LSE

Professor of International Economics, Graduate Institute of Geneva; Distinguished Fellow, INSEAD Emerging Markets Institute, Singapore; President, CEPR


CEPR Policy Research