One Pager No.4 10 November 2010

Is the Eurozone Doomed?

The Rescue Plan Cannot Address the Central Problem

by Dimitri B. Papadimitriou, L. Randall Wray, and Yeva Nersisyan

The trillion-dollar rescue package European leaders aimed at the continent’s growing debt crisis in May might well have been code-named Panacea. Stocks rose throughout the region, but the reprieve was short-lived: markets fell on the realization that the bailout would not improve government finances going forward. The entire rescue plan rests on the assumption that the eurozone’s “problem children” can eventually get their fiscal houses in order. But no rescue plan can address the central problem: that countries with very different economies are yoked to the same currency.

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Research Topics

Financial Regulation

Associated Programs

The State of the US and World Economies

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Is the Eurozone Doomed?

The Rescue Plan Cannot Address the Central Problem

Research Topics

Associated Programs

Related publications

Can It Be Prevented This Time?

CBDC Next-Level: A New Architecture for Financial “Super-Stability”

Structural Change, Productive Development, and Capital Flows

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