Painful Euro Crisis and Lessons for the World – Part I

The slow-motion crisis of the euro seems to have reached a plateau with the formation of new governments in Greece and Italy. But Europe’s debt crisis is complex with far-reaching implications. In this two-part series, YaleGlobal examines the ramification of the crisis, the reform course Europe must take and the lessons that others can draw from it. In the first part of the series, Jacob Funk Kirkegaard of the Peterson Institute for International Economics identifies four overlapping crises: weak regulatory institutions, undercapitalized banks, uneven competitiveness and contagion. A global audience looks for Europe not only to end the debt crisis, but to restore confidence in so-called risk-free debt, and draft a script for avoiding repeat acts. Kirkegaard warns that that there is no easy fix – the world can expect the drawn-out containment efforts of the past 18 months to continue. If the reforms succeed, Europe will be a more tightly integrated union but one cannot rule out failure either. – YaleGlobal


Copyright © 2011 Yale Center for the Study of Globalization

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