Work detail

Parallel Currency: A Suitable Tool for Vulnerable Euro Zone Countries?

Author: Mgr. Kateřina Kortová
Year: 2013 - summer
Leaders: prof. Ing. Oldřich Dědek CSc.
Consultants:
Work type: EEI & EP
Masters
Language: English
Pages: 73
Awards and prizes:
Link:
Abstract: The recent financial and economic crisis led to a deepening of fiscal problems in
many countries all over the world. European countries were also hit hard by the
economic downturn. The critical situation in Greece and its negative impact on the
economic situation in the whole Euro zone has brought up many questions about the
rigidity and functionality of the euro concept. A majority of economists and
politicians support the idea of saving the Euro zone since the break up would be quite
costly. There are many ideas regarding a solution to the current situation, and one of
the most radical is the introduction of a parallel currency in the states which are
trapped in the debt crisis. The aim of the thesis is to take a critical look at the
historical development of different approaches to this theme with a focus on theories
based on the devaluation as the solution. The parallel currency theory is compared to
Euro zone break-up scenario and hard restructuring option and the positives and
negatives of each approach are analysed. Finaly the simulation on the Greeek case is
performed to prove or diproved the positive effects of parallel currency
establishment.

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