Exit: Time to Plan

by Jürgen von Hagen, Jean Pisani-Ferry, Jakob von Weizsäcker on 30 September 2009

Download: English

Category: BRIEFING PAPERS

Topics: Budgetary and monetary policies, Financial markets and regulation

Prepared for presentation at the informal ECOFIN Council meetings in Gothenberg, Sweden, on 1 Oct 2009, this paper discusses recommendations regarding exit strategies for budgetary policy, monetary policy and financial sector policy across Europe.

The authors argue that bank recapitalisation and restructuring should be a matter of urgency for EU member states and that governments should set debt targets to be reached by the end of 2014. They also explain that proper incentives are necessary to ensure that an exit strategy is implemented in coordination between various institutional actors. Such a policy framework should be in place by summer 2010, the authors recommend, in order to avoid a buildup of financial instability during the process.