Search Results for: bce

In this article the divergences within the euro area are examined in the light of balance-of-payments imbalances recorded in the TARGET2 balances of the individual countries. It emerges that countries with positive values ​​of the target balances (surpluses) have lower interest rates than the Euro area average and countries with negative values ​​(deficits) have higher than average rates. Furthermore, an inverse relationship also emerges between balance of payments balances and poverty. The centralized measures of monetary policy and quantitative easing, together with fiscal restrictions for countries in deficit seem not to have resolved these differences and a new strategy is proposed to reduce divergences. This strategy, inspired by the post-war Keynes plan, should include expansionary measures for the creditor countries, such as: 1) fiscal expansion; 2) increase in money wages and 3) direct foreign investment in countries in difficulty.