The case for a euro-TARP Cover Image

The case for a euro-TARP
The case for a euro-TARP

Author(s): Karel Lannoo
Subject(s): Economic policy, EU-Accession / EU-DEvelopment, Financial Markets, Fiscal Politics / Budgeting
Published by: CEPS Centre for European Policy Studies
Keywords: EU; TARP; euro-zone; economic stability; EFSF; aid; financial markets;
Summary/Abstract: The European Union should move quickly to enact an American-style ‘TARP’1 in the euro-zone to strengthen the financial sector and maintain lending. Through the European Financial Stability Facility, the EU now has the structure in place for a truly European support fund for the banking sector, which it did not have in 2008. This should be put into motion without delay, taking into account the lessons of the 2008 crisis and applying EU state aid rules. A euro-zone recapitalization fund would better limit distortions to the functioning of the single market than the current arrangement of ad hoc guarantees and support mechanisms.

  • Page Count: 2
  • Publication Year: 2011
  • Language: English