№277. Unholy compromise in the eurozone and how to right it
№277. Unholy compromise in the eurozone and how to right it

Author(s): Stefano Micossi
Subject(s): National Economy, Economic policy, Government/Political systems, EU-Accession / EU-DEvelopment, Financial Markets
Published by: CEPS Centre for European Policy Studies
Keywords: Eurozone; Monetary union; Financial markets; Foreign claims of German banks; General government debt and deficit;
Summary/Abstract: Two years after the first Greek rescue in May 2010, crisis management in the eurozone has still failed to restore confidence. A vivid picture of the situation can be found in Figure 1: the constellation of spreads on ten-year sovereign debts over the Bund in the eurozone is wider thanit was before monetary union, as though financial markets had already discounted its breakdown. Temporary respites, notably in the early part of 2012, have not interrupted the trend of increasing divergence that risks undermining the credibility of adjustment efforts under way.

• Details
• Contents