EUROZONE CRISES

Eurozone Crises

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Eurozone Crises

The debt crisis in the euro area means a sequence of financial events that have affected, since the beginning of 2010, the economies of 17 member states of the European Union that use the euro . It begins in 2010 with the Greek debt crisis, caused it by highlighting the Greek debt, as well as a large and constant deficit. It extends to the fall of 2010 with the crisis of public debt of Ireland, caused by the rescue of its banks, made necessary by previous excesses of private debt. Partly as a result of the crisis of government debt market storm occurs during the summer of 2011.

Problems with different political visions

For Jacques Delors currency is a step towards a federal Europe that according to Jean Pisani-Ferry "it means by a convoluted formula of caution: federation of nation states." If the purpose for Delors, is institutional, on the contrary for the Germans the bulk is not in institutions but in the "links between peoples who share the same currency" or in the words of the President of the Bundesbank to 'Then, Hans Tietmeyer , taking a formula Nicolas Oresme , "money does not belong to the prince, but to the community" (Rothbard 2011).

This divergence is reflected in the French request for an economic government. For Jean Pisani-Ferry, in fact through this term that they have difficulty explaining the French express mainly the fact that they do not design a currency without a state . The Germans see the economic government as an attempt to takeover the European Central Bank and hence distrust, the French people are caught between conflicting emotions. On the one hand they want an economic government but on the other hand, they do not want to transfer power to the European Commission and take liberties with the laws common. In fact the Germans would be more to a political union as the French. For Jean Pisani-Ferry, during the Maastricht negotiations “François Mitterrand murdered without qualms political union by making alliance with the British against the Federalists projects .”

All this resulted in a common currency coupled with minimum solidarity clause and no bail-out which means "that neither the Union nor the other Member States can not meet the commitment of a European state"

Causes

Cyclical causes

The crisis of public debt is the symptom which should result in seeking the root causes are multiple and vary from one country to another: a very high public debt related to structural problems (inability to lift the Tax and spending to master), a housing boom in Spain that led private agents to contract amounts of risky private debts, lack of appreciation by the banks of the risks involved both in the granting of loans in their refinancing, too modest efforts (since the subprime crisis ) regulating banking and financial sector , weak growth that affects all of the old industrialized countries since the economic crisis called the Great recession (2008 and after) , the cumulative effect caused by expectations ...