Open AccessMauno Koivisto Lecture 2013: The end of the Eurocrisis?
Author(s) -
Paul De Grauwe,
Yuemei Ji
Publication year - 2014
Publication title -
research on finnish society
Language(s) - English
Resource type - Journals
eISSN - 2490-0958
pISSN - 1796-8739
DOI - 10.51815/fjsr.110725
Subject(s) - creditor , restructuring , debt , bureaucracy , deflation , legitimacy , government (linguistics) , european debt crisis , democratic legitimacy , economics , democracy , debt crisis , financial system , political economy , debt restructuring , power (physics) , political science , economic policy , keynesian economics , monetary policy , european union , sovereign debt , macroeconomics , finance , european integration , politics , law , physics , sovereignty , philosophy , linguistics , quantum mechanics
We argue, first, that the Eurozone crisis has left a legacy of unsustainable government debt levels. These will continue to exert a deflationary dynamics in the Eurozone except if creditor nations are willing to contemplate a debt restructuring. Second, we argue that the institutional innovations since the start of the debt crisis fall short of what is needed to solve the design failures of the Eurozone. In addition, they are not sustainable, mainly because they have led to a situation where bureaucratic institutions have been vested with more responsibilities without a concomitant increase in the democratic legitimacy of these institutions. We conclude that the Eurocrisis is not over.