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Europe’s Vicious Spirals

BERKELEY – The euro crisis shows no signs of letting up. While 2011 was supposed to be the year when European leaders finally got a grip on events, the eurozone’s problems went from bad to worse. What had been a Greek crisis became a southern European crisis and then a pan-European crisis. Indeed, by the end of the year, banks and governments had begun making contingency plans for the collapse of the monetary union.

None of this was inevitable. Rather, it reflected European leaders’ failure to stop a pair of vicious spirals.