Europe-America Speaker Series: "Crisis in the Eurozone" with Dr. James Caporaso
On Friday March 22nd, CEUCE was honored to host Dr. Jim Caporaso of the University of Washington for a discussion the crisis of the Eurozone.
The outbreak of the crisis in Greece was quickly followed by financial contagion to other members of the Economic and Monetary Union (EMU) though of course in different ways. Initially the crisis was (mis) represented as a sovereign debt fiasco and a failure of prudent fiscal policies in five peripheral EMU states (Greece, Portugal, Spain, Italy, and Ireland). However, the causality is much more complex and requires that we distinguish among background factors (including structural flaws in the Treaty), uneven capital flows and domestic booms, the dynamics of divergence among countries in the North and South in terms of competitiveness, the resulting balance of trade crisis, and finally, the fiscal crisis that partly resulted from the socialization of private and banking debt. Because the sources of the crises are multi-faceted and interactive, the solutions are complex and resist the simple notion that austerity can put the European construction back in order.