Abstract
Chapter 8 draws on an early, tentative analysis of John Maynard Keynes, his famous ‘Economic Consequences of the Peace’ of 1920 which focuses on two distinct deficiencies of the time, excessive external government debt and external (macroeconomic) imbalances. With reference to Keynes, the chapter analyses the specific stock-flow inconsistency of monetary relations in the euro area and, taking Greece as an example, discusses solvency conditions for governments. Turning to the rescue measures taken by the European Council, these are assessed as short-term solutions compared to the measures Keynes had proposed. The focus on austerity has as a consequence that stock-flow inconsistency continues to exist.
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Tomann, H. (2017). The Burden of Public Debt and the European Stability Mechanism. In: Monetary Integration in Europe. Studies in Economic Transition. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-59247-3_8
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DOI: https://doi.org/10.1007/978-3-319-59247-3_8
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Publisher Name: Palgrave Macmillan, Cham
Print ISBN: 978-3-319-59246-6
Online ISBN: 978-3-319-59247-3
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