ABSTRACT
Facing the fragility of the current status quo of the euro zone, this chapter explores a last alternative, the calling into question of the single currency itself. A multi-speed euro zone with the re-introduction of nominal exchange rates adjustment within the euro zone could take two forms. The first one is based on a multi-euro regime with a global euro remaining at the international level and national euros which are reintroduced but are not internationally convertible. The second type relies on a euro-bancor which is a simple basket currency and on national currencies which are convertible and in a fixed, but adjustable, exchange rate with the euro-bancor. The ECB is transformed in a clearing union with both debtor and creditor countries paying interests on their euro-bancor balances at the clearing union. A four-country SFC model (with Germany, Spain, the United States and the rest of the world) is used to assess these alternative monetary regimes of the euro zone. Each alternative has its strengths and weaknesses. Exchange rate adjustments appear as a key point, but they are not the panacea and have to be combined with structural policies. The transition period and the management of the external debt raise several sets of problems.
