Why is the debt crisis spreading throughout the euro area? (115th BRE Bank-CASE seminar)

After the financial and economic crisis of 2009, Europe is now facing unprecedented and escalating fiscal crisis. Until now, the latest crisis has reached only developed countries, including the Eurozone.

Countries hit by the crisis have high public deficits and increasing levels of public debts. The fact that the Eurozone countries had to give up on their monetary policy would seem a natural explanation of the situation. However, in Charles Wyplosz’s opinion, the mistakes in the reaction and policies of both the Eurozone governments and the ECB played a major role in the crisis escalation. The Euro area is an unfinished project – monetary union was created without reaching the fiscal union, mainly due to the political reasons.      

On the 16th June the guests of the 115th BRE Bank-CASE seminar have been discussing the fiscal crisis in the Eurozone.

Full text of Charles Wyplosz’s lecture will be available in BRE Bank - CASE Seminar Proceedings No. 115 [in pl.].