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The Euro Trap
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The Euro Trap: On Bursting Bubbles, Budgets, and Beliefs

Hans-Werner Sinn

Abstract

This book offers a critical assessment of the history of the euro, its crisis and the rescue measures taken by the European Central Bank and the community of states, above all the extra refinancing credit provided by local central banks (Target credit) which dwarfs all other rescue credits. The euro induced huge capital flows from the northern to the southern countries of the Eurozone that triggered an inflationary credit bubble in the latter, deprived them of their competitiveness, and made them vulnerable to the financial crisis that spilled over from the US in 2007 and 2008. As private capi ... More

Keywords: Target, European Central Bank, rescue operations, euro, Maastricht Treaty, credit bubbles, ECB

Bibliographic Information

Print publication date: 2014 Print ISBN-13: 9780198702139
Published to Oxford Scholarship Online: October 2014 DOI:10.1093/acprof:oso/9780198702139.001.0001

Authors

Affiliations are at time of print publication.

Hans-Werner Sinn, author
Professor of Economics and Public Finance; President, University of Munich; CESifo Group