Cracks in Euroland and no way out

Flassbeck, Heiner; Spiecker, Friederike

doi:10.1007/s10272-009-0272-4

Cited by 4 publications

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“…From opposite ends of the theoretical spectrum, Wynne Godley (1992) and Milton Friedman (2007) both indicated the inherent contradiction between a unified monetary policy and a fragmented fiscal authority (Godley, 1992; Taylor, 2000). While Heiner Flassbeck (2009) drew attention to the persistent differences in competitiveness across the Eurozone (Flassbeck and Spiecker, 2009). The danger was always present that the absence of the single fiscal authority, combined with a fixed exchange rate regime but uneven economic development, would remove the ability of fiscal transfers through taxation and spending to overcome divergences in productivity, employment, and industrial structure.…”

Section: The Euro's Flaws and Imbalancesmentioning

confidence: 99%

The Euro: Crisis and Collapse?

Meadway

2012

Competition & Change

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By the end of the last decade, the European project appeared secure. Monetary union had been successfully negotiated and Eurozone members who had previously lagged, like Greece and Ireland, had sustained high rates of growth since their entry to the single currency in 1999. It did not seem ridiculous for a former foreign policy advisor to Tony Blair, Mark Leonard, to tell us in breathless style Why Europe Will Run the 21st Century (2005) . Citing Europe's new synthesis of social democracy's concern for welfare with the liberalism's support for freedom, Leonard happily forecast the spread of the European model to the rest of the world. That vision, needless to say, now lies in ruins. Europe, both as a constellation of supranational institutions making up the European Union, and as a collection of different nation states, is in a deep, and deepening, crisis. For the last eighteen months, its political leaders have met with increasing frequency to offer a succession of failed solutions, with the gap between the summit's final statement of intent and its collapse seemingly shrinking on every occasion. The malaise looks incurable.

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