The Euro Crisis Or The Crisis Of The Euro Zone
This article is a result of the usual debates taking place within our research centre, being conducted by the research team that has been dealing for several years with the adoption of the euro by the new member states of the European Union (EU). The recent financial crisis brought in the middle of many assessments the question of the euro credibility and its power to continue to be an attractive project at the level of the Union, at a time when countries from both inside and from outside the single currency area had been seriously challenged. Many people were looking to those challenges as deadly for euro, talking about a crisis of the single currency and the fear that this project will vanish exactly after ten years of existence, celebrated with enough feast. It is known that euro is yet an unfinished project compared to the theory requirements of the optimal currency zone, but its implementation counted a lot on the political will of the founder member countries of the euro zone, in the sense that the discipline in economic policies aimed at the optimal convergence depending on the principles on which a full-fledged currency zone is working will be correctly fulfilled. It was the financial crisis with its effects in economic, sovereign debts and fiscal consolidation fields that have brought to the attention that the speed of the single monetary policy is far from being fitted with the move of the national fiscal budgetary policies, their qualities being more and more in divergence. More than that, the debt crisis showed that the countries are very busy with their own internal problems and they need more space to act domestically under the social pressure to which their governments are exposed, so their application for the principles of the Stability and Growth Pact is more lose than ever. That is the core point that the EU Commission is engaged in the process of strengthening the economic coordination between member states within the framework of improved economic European Governance, the Pact for Euro being discussed and implemented for the sake of a better competitiveness and a higher degree of convergence. It is about the euro zone crisis, out of which euro is suffering, so the suggestion that the monetary union is in a great need for its economic pillar e.g. a kind of "unification" in the fiscal-budgetary policies, is a reality imposed not only by theory, but by the practical existence of euro, as one of the most courageous economic project ever done. The whole matter consists in the need of solving the euro zone crisis in terms of a strong leadership, keeping alive the initial engagements of building up an authentic Economic and Monetary Union that means a greater responsibility on the shoulders of the member states at a time when to respond to it is more difficult than ever. The task probably can be easier, the research team trying to understand better the meaning of the many recent developments through debating them.
Volume (Year): 15 (2011)
Issue (Month): 2 ()
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- Issing, Otmar, 2008. "The Euro: A currency without a state," CFS Working Paper Series 2008/51, Center for Financial Studies (CFS).
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