Euro crisis solutions: An ongoing debate

Tom McDonnell08/05/2012

Tom McDonnell: The Irish body politic and especially its commentariat will no doubt spend the next few weeks obsessing and navel gazing over the fiscal compact and its perceived impact on Ireland. Yet in truth the real debate that matters is the one going on at the Euro zone level. The institutional and policy architecture of the Euro zone is deeply flawed at a structural level. These flaws have been cruelly exposed by the response to the debt crisis and by the failures leading up to the banking and debt crisis. How Europe now decides to respond will decide the future shape of the Euro zone and it is in that intellectual space that Ireland must begin engaging in.

There are a number of useful 'non-official, non-Irish' resources on the Internet for those interested in the debate:

The Eurointelligence feed (newsbriefing@eurointelligence.com) is probably the best free daily resource on the Euro crisis that is out there. It combines news and media reports from around the Euro zone with high quality analysis. See here.

Over at VOX EU there is a lively debate going on about the merits, or otherwise, of austerity. See here.

The Social Europe Journal is another site worth a visit for its analysis of the crisis and for a constructive, albeit damning, critique of current policies.

Well worth a look at from time to time are the CEPS, Project Syndicate and Breugel websites while John McHale helpfully adds a few additional links here. Yanis Varoufakis provides the perspective from Greece here.

Across the atlantic Paul Krugman and the idiosyncratic Brad DeLong regularly provide external and often scathing perspectives on the official response to the Euro crisis.

Finally, the Financial Times and the Guardian usually conduct rolling live blogs whenever the latest Euro zone drama erupts.

This is just a small selection. We are in the midst of a multidimensional crisis with multiple targets. There can be no silver bullet in such a scenario. Nevertheless there are viable solutions out there that can, taken as a package, ensure the viability of the Euro zone over the medium-term. And not just a Euro zone where unemployment and poverty concerns are seemingly always secondary to concerns like narrow price stability.

Some of these solutions will undoubtedly be politically difficult. Ultimately Europe's leaders will need to decide what their vision for the Euro zone is, what is sacrosanct, and what is negotiable. Indeed they should be obliged to articulate their vision. This would bring a degree of much needed clarity to the discussion.

Posted in: EconomicsEurope

Tagged with: debt crisisEuro crisis

Dr Tom McDonnell

McDonnell, Tom

Tom McDonnell is senior economist at the NERI and is responsible for among other things, NERI's analysis of the Republic of Ireland economy including risks, trends and forecasts. He specialises in economic growth theory, the economics of innovation, the Irish and European economies, and fiscal policy. He previously worked as an economist at TASC and before that was a lecturer in economics at NUI Galway and at DCU. He has also taught at Maynooth University.

Tom obtained his PhD in economics from NUI Galway.


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