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 Research Projects at the MPIfG

The Euro in the Time of Covid-19

Lucio Baccaro, Björn Bremer, and Erik Neimanns


 
The coronavirus pandemic poses a new existential threat to the integrity of the eurozone. The most critical country seems to be Italy, where in the absence of debt mutualization (either explicitly through eurobonds or coronabonds, or implicitly through the balance sheet of the European Central Bank) the public debt is destined to further increase and a new financial crisis may emerge. Years of prolonged economic stagnation have led to a general disenchantment with the euro in Italy. Faced with the extra costs of Covid-19, Italian voters may prefer leaving the single currency to remaining in it, especially if the response to the crisis involves harsh austerity policies. The emergence of a credible threat of exit may either create an opportunity for the establishment of joint fiscal capacities, or break the common currency apart. This project studies preferences for the euro through survey experiments in Italy, Germany, and other European countries. Project duration: April 2020 to October 2021.
 

 
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