By Otto Hieronymi, Constantine A. Stephanou (eds.)

ISBN-10: 1137030577

ISBN-13: 9781137030573

ISBN-10: 1349440493

ISBN-13: 9781349440498

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Following the change from Communism to parliamentary democracy and from a state-owned and state-controlled economy to a market economy based on private initiative and private ownership, the size of the external debt and the debt service proved to be a constraint on the Hungarian economy. The new, freely elected government chose not to default on the debt, not to ask for a moratorium on the service of the debt—despite more or less direct suggestions from the US Treasury. The rationale of the Hungarian government was the legitimate fear that a debt default would have negative consequences for Hungary’s international position and standing both on financial markets and potential direct investors.

2). The rules of the Euro zone are far from perfect. In particular, the lack of explicit rights and duties of the European Central Bank (ECB) to show concern for the external value of the common currency and for the level of economic activity represent serious shortcomings in the initial design and in the actual record of the ECB. However, without the Euro zone the international monetary and financial crisis would have been even more difficult to manage than was the case in the period since 2008.

For most of history, or at least economic history, “national currencies”— the coins or paper money issued by the absolute monopolist, that is, the king or the government—coexisted with a globally valued commodity that could equally serve as money, most frequently gold. Even under the socalled classic gold standard, which many people consider as the best international monetary system that the world has ever known, national currencies thrived and played a useful role. Today, the monetary role of gold has almost completely disappeared, and national or “regional” currencies have all lost any links with physical commodities of relatively short supply.

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International Debt: Economic, Financial, Monetary, Political and Regulatory Aspects by Otto Hieronymi, Constantine A. Stephanou (eds.)


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