10. Possible Scenarios
high economic growth, EU grows out of debt
dramatic increase in taxes, dramatic cuts in
social benefits and pensions – debt repayment
defaults - Nordic €, decomposition of EMU? –
New Deutsche Mark? SK in or out? Plan B?
inflation (Quantitative Easing or similar facility
of buying bonds for new money produced by
ECB, LTROs)
transfer union / fiscal centralization – “fiscal
compact”, redistribution of wealth and losses
among EU countries, ESM, moral hazard,
tragedy of the commons, central planning,
slow growth, instability – nationalism, no real
“European citizen”
11.
12.
13. EFSF Guarantees as % of Public Revenues –
Burden on Economy in Convergence Process
