The Euro Crisis Revised: Where to go from here?

Posted: August 22, 2015 in Uncategorized

BuPoPe - Business & Politics for the People

With the reasons for the persistence of the crisis being the excessive high debt levels of national governments as well as the systematically ill-designed European Monetary Union (EMU), solutions must address both obstacles. In order to tackle the current crisis, austerity measures that lead to fiscal discipline must be complemented by a European Banking Union that will improve financial liquidity. The often suggested idea of a Fiscal Union faces several obstacles and is not implementable in the short- and medium-term.

Wads of euro banknotes are stacked in a pile in Vienna July 22, 2013. REUTERS/Leonhard Foeger Wads of euro banknotes are stacked in a pile in Vienna July 22, 2013. REUTERS/Leonhard Foeger

Core of the Crisis

Revisiting the core of the crisis, two big causes stand out. One the one hand, the crisis is caused by poor fiscal policy decisions in the past of governments across the EU. With many countries having had fiscal deficits even in the years of economic boom (mid 2000s), the national treasuries were…

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