Eurozone Crisis: It Ain’t Over Yet

by Paolo Manasse, Voxeu.org All G7 economies are struggling in the post-crisis climate, but US GDP has recovered to pre-crisis levels, while the Eurozone simply hasn’t. This column portrays the global crisis as a transitory shock for the US, but as a quasi-permanent shock for Europe. The policies that are needed get the Eurozone back on track do not seem to be politically feasible. As tension rises with every quarter of stagnation, prospects for the survival of the euro are not only not improving, they are actually getting worse. Despite apparent calm on the financial markets, no illusions that the storm is ending soon should be entertained. Indeed, we may well be in the eye of the hurricane. A calmness settled when Mario Draghi pledged that the euro was an irreversible project. Yet, the forces that could eventually break up the Eurozone are not only untamed but are grow...