Commentary
Uri Dadush
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Source: Getty
Other
Is Europe Doing Enough?
While European leaders have come a long way and now understand the full gravity of the situation—something that didn’t exist even six months ago—the German and French approach is far too demanding on peripheral countries and doesn’t offer enough support.
By Uri Dadush
Published on Dec 18, 2011
Is Europe doing enough to fix the crisis and save the euro?
European leaders are not doing enough. While they have come a long way and now understand the full gravity of the situation—something that didn’t exist even six months ago—the German and French approach is far too demanding on peripheral countries and doesn’t offer enough support.
To give more support to countries at the heart of the crisis, Europe could undertake more expansionary policies with the European Central Bank. Europe could also put more money into the European Financial Stability Facility and push much harder for a larger IMF package that would need support from the United States, China, and others. And debt restructuring is another possibility that has been explicitly ruled out at this stage.
To give more support to countries at the heart of the crisis, Europe could undertake more expansionary policies with the European Central Bank. Europe could also put more money into the European Financial Stability Facility and push much harder for a larger IMF package that would need support from the United States, China, and others. And debt restructuring is another possibility that has been explicitly ruled out at this stage.
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Expansionary policy and a bigger bazooka would help facilitate the very difficult adjustment in the troubled economies. People who think that the periphery is not adjusting painfully are simply not looking at the data. These countries are going through some of the worst downturns in history. These are painful processes that need and deserve more support. MORE►
About the Author
Uri Dadush
Former Senior Associate, International Economics Program
Dadush was a senior associate at the Carnegie Endowment for International Peace. He focuses on trends in the global economy and is currently tracking developments in the eurozone crisis.
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Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.
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