The euro crisis and its lessons from a Greek perspective

Thanos Skouras

MPRA Paper from University Library of Munich, Germany

Abstract: In the aftermath of the Lehman Brothers collapse, Germany's insistence that each country was to defend its banking system on its own rather than by the European Union acting jointly, is what triggered the euro crisis. This is because it made it inevitable that the weakest countries with the least healthy public finances would sooner or later come under attack. It is argued that the root of the crisis is not excessive sovereign debt but the deficient construction of the euro and, more specifically, the absence of a common treasury. The main lessons of the crisis are then briefly presented and a less evident lesson, at least for economists, is discussed at length. This is that national pride and prejudice can influence the unfolding of events in uncertain and dangerous ways that do not make rational sense. In the concluding sections, the present state of the crisis and the future prospects for Europe are examined and, finally, Greece’s future is assessed in the light of this analysis.

Keywords: crisis; European Union; debt; policy making; prejudice (search for similar items in EconPapers)
JEL-codes: E65 F36 G01 (search for similar items in EconPapers)
Date: 2013-03-18
New Economics Papers: this item is included in nep-eec, nep-hpe and nep-mon
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in Society and Economy 1.35(2013): pp. 51-69

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Journal Article: The euro crisis and its lessons from a Greek perspective (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:45221

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