The eurozone in bad need of a psychiatrist. EuropEos Commentary No. 6, 9 December 2010

Micossi, Stefano (2010) The eurozone in bad need of a psychiatrist. EuropEos Commentary No. 6, 9 December 2010. [Policy Paper]

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Abstract

Stefano Micossi, Director General of Assonime and member of the CEPS Board of Directors, observes in a new EuropEos Commentary that there is something surreal to the unfolding financial crisis of the eurozone, as the leaders grudgingly do what is needed to prevent disaster just minutes before it’s too late, and then in the next minute revert to the same behaviour that had brought them against the wall in the first place. He cites rising sovereign spreads within the area as the visible result of this strategy: they signal investors’ expectation that the future can only bring more of the same, a series of ever-larger sovereign debt crises, under Damocles’ sword that at some stage Germany, the paymaster of last resort, will close its purse and let Armageddon start.

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