Stage Three for the Euro Crisis?
The first two components of the euro crisis – a banking crisis that resulted from public and private over-leverage, followed by a sharp fall in confidence in eurozone governments – have been at least partly addressed. But that leaves the most dangerous component: the structural imbalance between the eurozone’s north and south.
BERKELEY – The first two components of the euro crisis – a banking crisis that resulted from excessive leverage in both the public and private sectors, followed by a sharp fall in confidence in eurozone governments – have been addressed successfully, or at least partly so. But that leaves the third, longest-term, and most dangerous factor underlying the crisis: the structural imbalance between the eurozone’s north and south.
BERKELEY – The first two components of the euro crisis – a banking crisis that resulted from excessive leverage in both the public and private sectors, followed by a sharp fall in confidence in eurozone governments – have been addressed successfully, or at least partly so. But that leaves the third, longest-term, and most dangerous factor underlying the crisis: the structural imbalance between the eurozone’s north and south.