Europe: The Crisis Within a Crisis

The European crisis is not a new crisis but an extension of the global crisis that started in 2007. It represents the third stage of the global crisis and is characterized by a combination of signs of productive recovery in some countries with recession in others, by the reproduction of the neoliberal orthodoxy in the economic policy of the major countries, and the formation of new areas of speculative bubbles and financial fragility. There are many institutional weaknesses in the European Union following the crisis: the lack of a lender of last resort; the neoliberal configuration of the institutional framework; the absence of mechanisms that would permit governments to reduce budget deficits other than through deflationary methods; and the lack of fiscal coordination. However, the problems of the European Union go beyond these institutional deficiencies: there are contradictions and difficulties on the structural level that go back to the beginning of the integration process. The main problem is that the euro, in contrast to the currencies of the developed countries (dollar, pound, yen), has no regional productive system, and much less a state, behind it.