Financial Causes and Real Sources of the European Crisis

The international crisis hit the Eurozone hard. Remarkably distinct patterns among the member countries played an important role in the resilience to the crisis. The Eurozone, and hence the euro, revealed to be highly vulnerable to external shocks, suffering of deep-seated as well as new structural and financial imbalances. At the same time, the Eurozone's ability to cope with its economic vulnerability was weak, revealing rigid and lengthy decision-making procedures and a fundamental lack of trust among governments. Coordinated policy responses were slow. However, the crisis gave an important push to the coordination of economic policies and related instruments. Such coordination was both an important part of the problem and, hopefully, an important component of the solution.