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The role of politicians in inciting financial markets to attack the eurozone. EuropEos Commentary No. 4, 21 June 2010

Carmassi, Jacopo and Micossi, Stefano (2010) The role of politicians in inciting financial markets to attack the eurozone. EuropEos Commentary No. 4, 21 June 2010. [Policy Paper]

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    Abstract

    While acknowledging that the sustainability of sovereign debt is a serious issue that must be confronted, this EuropEos Commentary finds that financial markets have blown the problem completely out of proportion, leading to a full-scale confidence crisis. The authors present evidence suggesting that politicians’ public disagreements and careless statements at critical junctures may have added oil to incipient fire. By creating the impression that domestic political interests would take precedence over orderly management of the Greek debt crisis, they raised broader doubts about their ability to address fundamental economic divergences within the area, which are the real source of debt sustainability problems in the medium term.

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    Item Type: Policy Paper
    Subjects for non-EU documents: EU policies and themes > Policies & related activities > economic and financial affairs > financial crisis 2008-on/reforms/economic governance
    EU policies and themes > Policies & related activities > political affairs > general
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > Centre for European Policy Studies (Brussels) > EuropEos Commentaries
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 17 Dec 2014 14:41
    Number of Pages: 6
    Last Modified: 17 Dec 2014 14:41
    URI: http://aei.pitt.edu/id/eprint/58437

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