The Eurozone Crisis and the Future of Europe The Political Economy of Further Integration and Governance

The authors uncover the roots of the eurozone crisis, focusing on various approaches on how it can be solved against the backdrop of a very deep financial and economic crisis and its strong social impact. They investigate the recent and future developments in the European Union showing that the financial crisis complicates institutional and policy repair in the EU as well as the stablishment of a lasting economic recovery. The fate of the eurozone underlies the future of the European Union, as any disarray at the core of the EU puts strong destabilizing forces into motion. Budget profligacy is far from explaining the depth of the current crisis in the eurozone; a flawed design and inadequate policy arrangements, which have invited rising imbalances among EU member states, are no less important in explaining the plight of and the disaffection in the eurozone. Even though the Banking Union project will provide a definitive solution to enhancing the cohesion of the eurozone, there are important technicalities and sequencing problems that still need clarification. Further policy arrangements going beyond the operations of a banking union will be needed in order to make the eurozone and EU function properly.

Daniel Daianu is Professor of Economics at the National School of Political and Administrative Studies, Bucharest, Romania, and first Deputy President of the Romanian Financial Supervision Authority. He is the former Finance Minister of Romania and MEP and is currently a member of the ECFR and of the Romanian Academy. Among his most recent publications is the monograph Which way goes capitalism (2009).

Carlo D'Adda is Professor Emeritus at the University of Bologna and member of the Accademia Nazionale dei Lincei, Rome, Italy. He is a former president of the Italian Economic Association (2001-2004).

Giorgio Basevi is Professor Emeritus of International Economics at the University of Bologna, Italy. He has been a member of the European Economic Association, the Italian Economic Association and the Centre for Economic Policy Research, and Treasurer of the European Economic Association. He is currently a Research Network Fellow at CESifo, and Fellow of the European Economic Association.

Rajeesh Kumar is a Researcher at the School of International Studies at Jawaharlal Nehru University, New Delhi, India. He taught at Jamia Millia Islamia and Calicut University, India.

1. Introduction; Daniel Daianu and Rajeesh Kumar
2. Overview: Analytics of the Euro Area Crisis; Carlo D'Adda and Giorgio Basevi
PART I: ECONOMIC IMBALANCES AND THE EURO AREA CRISIS
3. The Diversity of Debt Crises in Europe; Jerome Stein
4. European Sovereign debt Crisis and the Euro'; Julius Horvath and Martin Suster
5. Economic Policies and the debt/GDP Constraint: The European Challenge'; Radu Vranceanu
6. Current Account Imbalances in the Eurozone: Causes, Remedies and the Role of the ECB; Karhans Sauernheimer
PART II: CRISIS MANAGEMENT IN THE EURO AREA: THE INTERPLAY BETWEEN ECONOMICS AND POLITICS
7. The Euro Crisis and German Primacy; Jonathan Story
8. The Power of Ordoliberalism in the Eurozone Crisis Management; Brigitte Young
9. Italy and the Euro; Carlo D'Adda
10. Turning a Small Problem into Catastrophe: The Case of Greece; Kunibert Raffer
11. The Eurozone crisis. A Perspective from and Impact on Asia; Pradumna B. Rana and Michael R. Blomenhofer
PART III: THE EURO AREA: LOOKING INTO THE FUTURE
12. The EMU is No One-Way-Street: Back to the Roots!; Bodo Herzog
13. Changing Welfare States and the Euro Crisis; Anton Hemerijck
14. The long Term Implications of the Euro Crisis for European Integration: A Deeper Union of Fragmentation; Francesco Nicoli and Fabian Zuleeg
15; The Euro Area : Repairing A Flawed Design and Its Policy Arrangements; Daniel Daianu
16. Afterword: Summing up: The Crisis and Europe's Future; Daniel Daianu and Rajeesh Kumar