Looser integration and a sustainable solution to the Eurozone Crisis
New research published in Cogent Economics & Finance proposes a fresh solution to the Eurozone Crisis, through looser economic integration that recognises the differences in European economies.
In Pandora box - the Eurozone and the Euro Crisis, professionals from University of Bradford, Queen Mary University and University of Modena and Reggio Emilia, argue that the root of current problems in the Eurozone lies in the ratification negotiations of 1991 and 1992. These negotiations led to the establishment of a flawed economic model, the effects of which are now being felt across the Eurozone.
‘The EU was designed for mature democracies capable and willing to provide welfare to poorer citizens,’ said Bryan McIntosh, one of the team behind the article. ‘But the economic infrastructure created for them has been challenged by less developed eastern European economies. Some of these countries are still recovering from the legacies of communism. Close integration between these two types of economy has exacerbated the economic problems we see today.’
The article examines the potential negatives of mistimed austerity, the lack of a localised approach to solving local economic problems, and the desire on the part of many European political and economic leaders’ for ever closer union. It moves readers from the economic crisis of 2007 towards a sustainable, economically sound solution for the Eurozone. One that avoids compounding problems with greater union, or experiencing the disaster of currency collapse.
Published by the open access journal Cogent Economics & Finance, the article is freely available for anyone to read via this permanent link: http://dx.doi.org/10.1080/23322039.2015.1092860