The Euro: How a Common Currency Threatens the Future of Europe by Joseph E. StiglitzIn 2010, the 2008 global financial crisis morphed into the “eurocrisis.” It has not abated. The 19 countries of Europe that share the euro currency—the eurozone—have been rocked by economic stagnation and debt crises. Some countries have been in depression for years while the governing powers of the eurozone have careened from emergency to emergency, most notably in Greece.
In The Euro, Nobel Prize–winning economist and best-selling author Joseph E. Stiglitz dismantles the prevailing consensus around what ails Europe, demolishing the champions of austerity while offering a series of plans that can rescue the continent—and the world—from further devastation.
Hailed by its architects as a lever that would bring Europe together and promote prosperity, the euro has done the opposite. As Stiglitz persuasively argues, the crises revealed the shortcomings of the euro. Europe’s stagnation and bleak outlook are a direct result of the fundamental challenges in having a diverse group of countries share a common currency—the euro was flawed at birth, with economic integration outpacing political integration. Stiglitz shows how the current structure promotes divergence rather than convergence. The question then is: Can the euro be saved?
After laying bare the European Central Bank’s misguided inflation-only mandate and explaining how eurozone policies, especially toward the crisis countries, have further exposed the zone’s flawed design, Stiglitz outlines three possible ways forward: fundamental reforms in the structure of the eurozone and the policies imposed on the member countries; a well-managed end to the single-currency euro experiment; or a bold, new system dubbed the “flexible euro.”
With its lessons for globalization in a world economy ever more deeply connected, The Euro is urgent and essential reading.
The Eurozone Crisis For Dummies
The European sovereign debt crisis! It -- wait, come back. This is interesting, we promise. The debt crisis is one of the biggest stories of the year, maybe of the decade. If you're American, how can you tell whether the situation across the pond affects you? If you answered "yes" to either of the above, then the Europe situation probably has bearing on your life. Here's a quick explanation of what's happened.
Simone Foxman for Business Insider Worries about an economic catastrophe in Europe are heating up again, and dramatic forecasts about doom are popping up everywhere. By late last year, problems that had begun with the small economies of Greece, Ireland, and Portugal now threatened to jeopardize the entire European banking system, let alone inflict another global recession. Investors who had pooh-poohed the initial impact of these concerns were now boggled by the extent of the crisis. Sovereign bonds in the PIIGS countries Portugal, Ireland, Italy, Greece, and Spain — which just a few years ago were highly rated — have lost their high ratings, forcing banks to fear big write downs that cripple lending. Investors wary about the consequences of a Greek default and other economic problems are unwilling to loan out cash, producing a liquidity crisis.
In , EU economies, on the surface, seemed to be doing relatively well — with positive economic growth and low inflation. Public debt was often high, but apart from Greece it appeared to be manageable assuming a positive trend in economic growth. However, the global credit crunch see: Credit crunch explained changed many things. Eurozone countries with debt problems are also generally uncompetitive with a higher inflation rate and higher labour costs. This means there is less demand for their exports, higher current account deficit and lower economic growth. See more at Two speed Europe.
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Things only got worse in The crisis started in when the world first realized Greece could default on its debt. A new crisis might be brewing. On August 10, , President Trump announced he would double the tariffs on aluminum and steel imports from Turkey. He was trying to obtain the release of jailed American pastor Andrew Brunson.