The European Sovereign Debt Crisis
- (pp. 49-68)
AbstractThe origin and propagation of the European sovereign debt crisis can be attributed to the flawed original design of the euro. In particular, there was an incomplete understanding of the fragility of a monetary union under crisis conditions, especially in the absence of banking union and other European-level buffer mechanisms. Moreover, the inherent messiness involved in proposing and implementing incremental multicountry crisis management responses on the fly has been an important destabilizing factor throughout the crisis. After diagnosing the situation, we consider reforms that might improve the resilience of the euro area to future fiscal shocks.
Citation2012. "The European Sovereign Debt Crisis." Journal of Economic Perspectives, 26 (3): 49-68. DOI: 10.1257/jep.26.3.49
- E62 Fiscal Policy
- F34 International Lending and Debt Problems
- F36 Financial Aspects of Economic Integration
- H63 National Debt; Debt Management; Sovereign Debt