The Euro Crisis. What Went Wrong with the Single European Currency?
Author(s)
Antonio Goucha Soares*
Affiliation(s)
ISEG—School of Economics and Management, Technical University of Lisbon, Lisbon, Portugal.
ISEG—School of Economics and Management, Technical University of Lisbon, Lisbon, Portugal.
ABSTRACT
This article delivers a brief contribution to the debate about the Euro crisis. With that purpose it lists the objectives, interests and power relations underlined by the main political actors by the time of the introduction of monetary cooperation within the field of European construction. It begins with a reference to the first experiments of monetary cooperation between European countries—with the so-called European Snake, and later the European Monetary System—which were intended to protect the common market from the turmoil caused by the collapse of the international monetary system. It also addresses the adoption of the economic and monetary union by the Treaty of Maastricht, the creation of the single currency and the first attempt to control fiscal policy with the Stability and Growth Pact. Then it concentrates on the crisis affecting the Eurozone, initiated with the Greek sovereign debt crisis. It starts with a reference to core Euro countries early reaction to the crisis, to continue with the measures adopted to support the Euro system, before discussing what would be the much needed firewalls that could deter financial attacks. The final sections are devoted to the Fiscal Treaty, and to the impact of crisis management on the European Union balance of powers.
This article delivers a brief contribution to the debate about the Euro crisis. With that purpose it lists the objectives, interests and power relations underlined by the main political actors by the time of the introduction of monetary cooperation within the field of European construction. It begins with a reference to the first experiments of monetary cooperation between European countries—with the so-called European Snake, and later the European Monetary System—which were intended to protect the common market from the turmoil caused by the collapse of the international monetary system. It also addresses the adoption of the economic and monetary union by the Treaty of Maastricht, the creation of the single currency and the first attempt to control fiscal policy with the Stability and Growth Pact. Then it concentrates on the crisis affecting the Eurozone, initiated with the Greek sovereign debt crisis. It starts with a reference to core Euro countries early reaction to the crisis, to continue with the measures adopted to support the Euro system, before discussing what would be the much needed firewalls that could deter financial attacks. The final sections are devoted to the Fiscal Treaty, and to the impact of crisis management on the European Union balance of powers.
Cite this paper
A. Soares, "The Euro Crisis. What Went Wrong with the Single European Currency?," Beijing Law Review, Vol. 3 No. 3, 2012, pp. 81-91. doi: 10.4236/blr.2012.33011.
A. Soares, "The Euro Crisis. What Went Wrong with the Single European Currency?," Beijing Law Review, Vol. 3 No. 3, 2012, pp. 81-91. doi: 10.4236/blr.2012.33011.
References
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[1] L. Tsoukalis, “The New European Economy Revisited,” Oxford University Press, Oxford, 2003. [2] D. W. Urwin, “The Community of Europe: A History of European Integration since 1945,” 2nd Edition, Longman, London, 1997. [3] A. Moravcsik, “The Choice for Europe: Social Purpose and State Power from Messina to Maastricht,” Cornell University Press, New York, 1998. [4] T. Padoa-Schioppa, “The Road to Monetary Union in Europe: The Emperor, the Kings, and the Genies,” Clarendon Press, Oxford, 1994. [5] L. Tsoukalis, “Economic and Monetary Union,” In: H. Wallace and W. Wallace, Eds., Policy-Making in the European Union, 3rd Edition, Oxford University Press, Oxford, 1997, pp. 279-299. [6] K. R. McNamara, “Economic and Monetary Union”, In: W. Wallace, H. Wallace and M. Pollack, Eds., PolicyMaking in the European Union, 5th Edition, Oxford University Press, Oxford, 2005, pp. 141-160. [7] B. Marzinotto, A. Sapir and G. Wolff, “What Kind of Fiscal Union?” Bruegel Policy Brief, No. 6, 2011, pp. 1-8. http://www.bruegel.org/publications/publication-detail/publication/646-what-kind-of-fiscal-union/ [8] J. Pisani-Ferry, “The Euro Crisis and the New Impossible Trinity,” Bruegel Policy Contribution, No. 1, 2012, pp. 1-16. http://www.bruegel.org/publications/publication-detail/publication/674-the-euro-crisis-and-the-new-impossible-trinity/ [9] M. Feldstein, “The Failure of the Euro,” Foreign Affairs, Vol. 91, No. 1, 2012, pp. 105-116. [10] H. Schmidt, “Deutschland in Und Mit Europa,” 2011. http://www.spd.de/aktuelles/Pressemitteilungen/21498/20111204_rede_helmut_schmidt.html [11] M. Leonard, “Four Scenarios for the Reinvention of Europe,” European Council on Foreign Relations, London, 2011, pp. 1-16. http://www.ecfr.eu/page/-/ECFR43_REINVENTION_OF_EUROPE_ESSAY_AW1.pdf [12] M. Auerback, “A ‘United States of Europe’ or Full Exit from the Euro?” International Journal of Political Economy, Vol. 39, No. 4, 2011, pp. 87-102. doi:10.2753/IJP0891-1916390404 [13] D. B. Papadimitriou and L. R. Wray, “Euroland in Crisis as the Global Meltdown Picks up Speed—Working-Paper No. 693,” Levy Economics Institute of Bard College, New York, 2011. http://www.levyinstitute.org/pubs/wp_693.pdf