The Eurozone in the Current Crisis

19 Pages Posted: 17 Apr 2010

See all articles by Charles Wyplosz

Charles Wyplosz

University of Geneva - Graduate Institute of International Studies (HEI); Centre for Economic Policy Research (CEPR)

Date Written: March 26, 2010

Abstract

This paper contrasts the United States and European situations during the crisis and examines how much of the crisis has been imported by Europe from the US. The paper argues that Europe never had a chance to avoid contagion from the US. It also documents the relatively limited reaction of both monetary and fiscal authorities. Muted fiscal policy actions may well be a consequence of the Stability and Growth Pact despite its having been de facto suspended. While the European Central Bank intervened promptly and massively to attempt to maintain liquidity in the money market, it has been slow in dealing with the upcoming recession. The concluding remarks consider the differences that the monetary union has made and their relevance.

Keywords: US European economic crisis, global financial crisis, Europe imported financial crisis

JEL Classification: E02, E42, E58, E61, F32, F33

Suggested Citation

Wyplosz, Charles, The Eurozone in the Current Crisis (March 26, 2010). ADBI Working Paper No. 207. Available at SSRN: https://ssrn.com/abstract=1589990 or http://dx.doi.org/10.2139/ssrn.1589990

Charles Wyplosz (Contact Author)

University of Geneva - Graduate Institute of International Studies (HEI) ( email )

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HOME PAGE: http://heiwww.unige.ch/~wyplosz

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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