1. The Coming Resolution of the European Crisis: An Update
- Author:
- C. Fred Bergsten and Jacob Funk Kirkegaard
- Publication Date:
- 06-2012
- Content Type:
- Policy Brief
- Institution:
- Peterson Institute for International Economics
- Abstract:
- Getting the diagnosis right is a prerequisite for understanding the euro area predicament and evaluating key decisions taken since early 2010. As we laid out in Bergsten and Kirkegaard (2012), while the euro area faces multiple overlapping and mutually reinforcing elements of fiscal (Greece), banking (Ireland/Spain), and competitiveness (Southern periphery) crises, it is first and foremost facing a crisis of institutional design. The common currency as designed in the Maastricht Treaty of 1992 is a half-built house without the critical components of banking and fiscal union necessary to sustain it through the type of crushing economic and financial down- turn witnessed since October 2008.
- Topic:
- Economics, International Trade and Finance, Monetary Policy, and Financial Crisis
- Political Geography:
- Europe