Saturday, May 15, 2010

Fiscal crisis, contagion, and the future of euro

by Marco Pagano

May 15, 2010

The Eurozone has been swept up in turmoil that has ranged from stock and bond markets to exchange rates, government spending and tax rates. Marco Pagano, Professor at the University of Naples Federico II and CEPR Research Fellow, explains events, how they hang together, and what needs to be done. This challenge facing Europe could be a historical turning point.

Fiscal crisis, contagion, breakdown of the Euro... Let’s try to understand what is going on. In the past few days, the scenarios discussed in the media have been changing so rapidly and dramatically that for many it may be hard to grasp the reason behind them. But in emergencies such as the one we are currently experiencing, they way to escape the worse scenarios and find an exit strategy is stick to clear-headed thinking.


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