Crisis in the Eurozone

Grahl, John (2011) Crisis in the Eurozone. Soundings, 47 (8). pp. 143-158. ISSN 1362-6620


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Analyses the problems for market economies in a monetary union, which centre on the challenge of addressing the divergence in competitiveness or in the general rate of production and employment across the member economies. Grahl argues that EU economic policy does not acknowledge these problems and therefore is doomed to failure. In particular German economic policy continues to make efforts to enhance its dominant position, with the inevitable result that other economics suffer. This has been made worse by the financial crisis, which has hit the weaker economies hardest. Short-term lending will not solve this problem, since the weaker economies may be facing problems of insolvency rather than liquidity. A long-term solution is required, based on a measure of Europeanisation of the debt, by means of establishing a permanent agency with strong guarantees from the EU and member states, to take over enough of the debt to restore clear financial stability. Given that the Eurozone as a whole is immensely rich and powerful, it would be easy for such an agency to borrow on a large scale and at very low interest rates.

Item Type:Article
Research Areas:A. Middlesex University Schools and Centres > Business School > Economics
ID Code:7940
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Deposited On:14 Jun 2011 08:12
Last Modified:04 Mar 2015 14:30

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