The Future of Europe and the Euro

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In The Media

The Future of Europe and the Euro

As the Euro crisis continues to play out in Greece, troubled economies in Europe face years of slow growth and deflation unless European Union leaders overhaul fiscal and monetary policy.

By Uri Dadush

Published on Mar 8, 2010

Source: Bloomberg News

As the Euro crisis continues to play out in Greece and other European countries, the future of the euro is being called into question. Troubled economies face years of slow growth and deflation unless EU leaders overhaul fiscal and monetary policy.

Uri Dadush explains that Greece, Spain, Ireland, Italy, and Portugal face a “severe risk of prolonged depression.” Although fiscal policy adjustments will help the situation, “one part of the solution is to have more expansionary monetary policy” in other European nations. In order to restore competitiveness, troubled economies must reduce their real wages, but they also “need some growth in nominal GDP in order to deal with their rising debt burdens.” Regardless of any policy changes, however, Europe will likely see "slower growth...for several years."

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.

Recent Work

Commentary
The Labors of Tsipras
- Uri Dadush
In The Media
Greece, Complacency, and the Euro
- Uri Dadush

Economy Western Europe United Kingdom France Germany North America

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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