TY - JOUR U1 - Zeitschriftenartikel, wissenschaftlich - begutachtet (reviewed) A1 - Herzog, Bodo T1 - Modelling monetary and fiscal governance in the wake of the sovereign debt crisis in Europe JF - Economies N2 - This paper analyzes different government debt relief programs in the European Monetary Union. I build a model and study different options ranging from debt relief to the European Stability Mechanism (ESM). The analysis reveals the following: First, patient countries repay debt, while impatient countries more likely consume and default. Second, without ESM loans, indebted countries default anyway. Third, if the probability to be an impatient government is high, then the supply of loans is constrained. In general, sustainable and unsustainable governments should be incentivized differently especially in a supranational monetary union. Finally, I develop policy recommendations for the ongoing debate in the Eurozone. KW - European Monetary Union KW - debt relief KW - debt crisis KW - european stability mechanism Y1 - 2016 UN - https://nbn-resolving.org/urn:nbn:de:bsz:rt2-opus4-11148 SN - 2227-7099 SS - 2227-7099 U6 - https://doi.org/10.3390/economies4020009 DO - https://doi.org/10.3390/economies4020009 VL - 4 IS - 2 SP - 1 EP - 11 S1 - 11 PB - MDPI CY - Basel ER -