The Eurozone’s Uncertainty Principle
Eurozone leaders have repeatedly been forced to resort to ad hoc, unpredictable measures to keep even non-compliant countries in the the monetary union. To restore balance and reassure financial markets, the eurozone must establish objective criteria and a clear strategy according to which members would leave.
TILBURG – If there is one thing that financial markets detest, it is prolonged uncertainty. But, since the eurozone crisis began, policymaking in the monetary union has become increasingly unpredictable. Early private-sector involvement in supporting the troubled eurozone countries was unexpected. The recent deal to save Cyprus, which includes forced losses on large depositors, was similarly surprising – and is threatening to damage further the eurozone’s already-delicate relationship with financial markets.
TILBURG – If there is one thing that financial markets detest, it is prolonged uncertainty. But, since the eurozone crisis began, policymaking in the monetary union has become increasingly unpredictable. Early private-sector involvement in supporting the troubled eurozone countries was unexpected. The recent deal to save Cyprus, which includes forced losses on large depositors, was similarly surprising – and is threatening to damage further the eurozone’s already-delicate relationship with financial markets.