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Lies and Truth About the Financial Crisis in the Eurozone

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  • Alain Parguez

Abstract

By integrating Richard Koo's general theory of balance sheets and the general monetary circuit approach through a genuine stock flow analysis, I prove that the two financial crises in the eurozone, the banking and the currency crises, were caused by disastrous policy choices of governments imposing shock therapy policies for at least forty years. Banks played a passive role in striving to save their net worth. They also had to react to a private capitalist system more and more tempted to play a purely predatory/parasitical role. Finally, the absurd structure of the eurozone worsened an otherwise disastrous situation. Europe is doomed to an increase in public debt and is heading toward long-term instability. Salvation is possible, but not within the straitjacket of the eurosystem aimed at the dismantling of the state.

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  • Alain Parguez, 2010. "Lies and Truth About the Financial Crisis in the Eurozone," International Journal of Political Economy, Taylor & Francis Journals, vol. 39(4), pages 31-55.
    • Handle: RePEc:mes:ijpoec:v:39:y:2010:i:4:p:31-55
    DOI: 10.2753/IJP0891-1916390402
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    Cited by:

    1. George Galanos & Thomas Poufinas, 2018. "Impact of FDI in the Fiscal Adjustment Process," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 24(3), pages 265-277, August.
    2. Nadia Oliva & Andrea Pacella, 2016. "The Ethics Inside the Monetary Circuit: How Bank’s Social Responsibility Affects Money Creation," International Journal of Business and Management, Canadian Center of Science and Education, vol. 11(7), pages 1-1, June.

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