Blog post
14/12/10Closing the year, closing the crisis
On the eve of the European Council of 16th and 17th of December, Tommaso Padoa-Schioppa expresses his view on the way the EU has handled the crisis since the 2009 Spring European Council.
2010 has been the year in which the crisis has come to Europe. How can you describe the responses of the EU to the crisis, now that we approach the end of the year?
If we describe this crisis as a hurricane, which moves from one place to another making victims of different types, indeed 2010 has been the year in which the hurricane has targeted sovereign debt in Europe. Previously it had targeted the sub-prime market, toxic assets and large US financial institutions. In Europe, however, the real target of the market hysteria has been not so much the debt of individual countries (Greece, Ireland and possibly Portugal, Spain or Italy) but the euro itself.
What markets have been and are still testing is the capacity of the euro area to act as a single effective policy-maker in front of a crisis. They no longer seem to believe that “a currency without a State” is indefinitely sustainable
Authors
Tommaso Padoa-Schioppa
