The euro crisis and its lessons from a Greek perspective
AbstractIn the aftermath of the Lehman Brothers collapse, Germany's insistence that each country was to defend its banking system on its own rather than by the European Union acting jointly, is what triggered the euro crisis. This is because it made it inevitable that the weakest countries with the least healthy public finances would sooner or later come under attack. It is argued that the root of the crisis is not excessive sovereign debt but the deficient construction of the euro and, more specifically, the absence of a common treasury. The main lessons of the crisis are then briefly presented and a less evident lesson, at least for economists, is discussed at length. This is that national pride and prejudice can influence the unfolding of events in uncertain and dangerous ways that do not make rational sense. In the concluding sections, the present state of the crisis and the future prospects for Europe are examined and, finally, Greece’s future is assessed in the light of this analysis.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 45221.
Date of creation: 18 Mar 2013
Date of revision:
Publication status: Published in Society and Economy 1.35(2013): pp. 51-69
crisis; European Union; debt; policy making; prejudice;
Find related papers by JEL classification:
- E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
- F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
- G01 - Financial Economics - - General - - - Financial Crises
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-03-30 (All new papers)
- NEP-EEC-2013-03-30 (European Economics)
- NEP-HPE-2013-03-30 (History & Philosophy of Economics)
- NEP-MON-2013-03-30 (Monetary Economics)
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