Remedies for the Eurozone Crisis: Quack and Otherwise

23 Pages Posted: 6 Jun 2012

Date Written: June 6, 2012


The on-going crisis of the eurozone is calling its continued existence into doubt, and raising questions on whether it can function effectively. The view of the nature of the eurozone crisis as arising from ‘design faults’ of the Economic and Monetary Union and a balance of payments crisis with large current account imbalances between countries is developed. The policy remedies (in the form of the ‘fiscal compact’) which are being put into place will not work in their own terms and will make the economic performance of the eurozone countries worse. Some Keynesian remedies for the crisis in terms of alternative policy proposals for the operation of the Economic and Monetary Union are outlined.

Keywords: economic and monetary union, fiscal compact, budget deficits, structural reforms

JEL Classification: E62, F32

Suggested Citation

Sawyer, Malcolm C., Remedies for the Eurozone Crisis: Quack and Otherwise (June 6, 2012). Available at SSRN: or

Malcolm C. Sawyer (Contact Author)

Levy Economics Institute ( email )

Annandale-on-Hudson, NY 12504-5000
United States
845-758-7700 (Phone)
845-758-1149 (Fax)

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