The Euro Crisis and its Aftermath

The euro's life, while only slightly more than a decade long, has been riddled by a series of challenges and crises. The disparity between the prosperous Northern countries of Germany and France and the plummeting Southern countries, including Italy and Greece, has exacerbated problems within the political and economic union of the Eurozone. The North, especially Germany, has debated where to draw the line between doing whatever is necessary to save the common currency and what they have viewed as a charity bailout of countries who flouted the rules for a decade and suffered predictable consequences. Meanwhile, Southern countries such as Italy, Spain, and Greece have grown increasingly bitter at the patronizing attitudes of their partners to the North. Amidst loud and frequent debates, solutions including routes for increased integration and punitive policies and reforms have been enacted and discarded to a limited degree of success. The struggles facing this monetary union continue to develop even today. The Euro Crisis and Its Aftermath was written to inform readers about the history of this enduring European crisis and the alternative proposals for ending it. In four parts, Jean Pisani-Ferry explains the origins of the European currency, the build-up of imbalances and oversights that led to the crisis, the choices European policymakers have both addressed and ignored since 2010, and the evolution of the policy agenda and possible options for the future. The book is as much of an informative and analytical history as it is a prescriptive solution for a more prosperous future world economy. The euro's life, while only slightly more than a decade long, has been riddled by a series of challenges and crises. The disparity between the prosperous Northern countries of Germany and France and the plummeting Southern countries, including Italy and Greece, has exacerbated problems within the political and economic union of the Eurozone. The North, especially Germany, has debated where to draw the line between doing whatever is necessary to save the common currency and what they have viewed as a charity bailout of countries who flouted the rules for a decade and suffered predictable consequences. Meanwhile, Southern countries such as Italy, Spain, and Greece have grown increasingly bitter at the attitudes of their partners to the North. Amidst loud and frequent debates, solutions including routes for increased integration and punitive policies and reforms have been enacted and discarded to a limited degree of success. The struggles facing this monetary union continue to unfold even today. The Euro Crisis and Its Aftermath was written to inform readers about the history of this enduring European crisis and the alternative proposals for ending it. In four parts, Jean Pisani-Ferry explains the origins of the European currency, the build-up of imbalances and oversights that led to the crisis, the choices European policymakers have both addressed and ignored since 2010, the evolution of the policy agenda, and possible options for the future. The book is as much of an informative and analytical history as it is a prescriptive solution for a more prosperous future world economy. Rather than putting forth and supporting a thesis, Pisani-Ferry helps readers understand the past and present of the euro crisis and form their own opinions about potential solutions. It has grown out of his book Le Reveil des Demons published in France in 2011. The content has been updated extensively to cover the events of the past few years and augmented to better explain the Eurozone to a global audience. This book is not intended to reach only economists, as time has long passed since European monetary unification was a debate limited to academics. This book is also for the policy makers searching for solutions, citizens of Europe enduring the consequences, and the international community that has felt the effects of an unstable Eurozone. It is succinct and clear enough to serve as the best available guide to the euro mess for non-European, non-economists. The Wall Street Journal's 'Washington Wire' This is a brilliant book about the euro. It suprises with its refreshing mixing of history, politics, and economics. Paul de Grauwe, London School of Economics and Political Science An excellent, well-balanced, and beautifully written book on the euro-crisis, its causes, its on-going developments, and its possible cures. Required reading. Charles Goodhart, Professor Emeritus, London School of Economics and Political Science A highly readable and clearheaded account of not just what went wrong, but also what must be done to save the European project. No global financial issue is more pressing than the future of the EMU. If you are going to read only one book about it, read this one. Jean Pisani-Ferry is wise nad balanced while being simultaneously sharp and incisive. This is must-reading for anyone who cares about Europe's future. Larry Summers, former Secretary of the U. S. Treasury I bet this book will be the source to go to on the Euro crisis... If policy nmakers have the wisdom, they will follow Pisani-Ferry's advice, and Europe will heal. Olivier Blanchard, Director of Research, International Monetary FundAcknowledgements ; Introduction ; PART 1: BARE-BONES UTOPIA ; 1. The day the euro ceased to be boring ; 2. The last utopia of the century ; 3. The walls of Frankfurt ; 4. Only one bed for two dreams ; 5. The orphan currency ; PART 2: CRISES FORETOLD, UNEXPECTED CRISES ; 6. Germany's long penance ; 7. The perfect culprit ; 8. The golden decade ; 9. The misfits ; 10. The dogs that did not bark ; PART 3: AGONIES OF CHOICE ; 11. To help or not to help ; 12. Let the banks pay? ; 13. A lender of last resort? ; 14. Redemption through austerity? ; 15. Let's break it up? ; PART 4: THE REPAIR AGENDA ; 16. Fixing the economy ; 17. Sharing financial risk ; 18. A real or a mock budget? ; 19. A European safe asset ; 20. Governance reform ; Conclusions ; Glossary ; Euro crisis timeline ; Selected references