Ten years after its creation, the euro experienced its first major crisis. This raises many questions before seeking and providing answers.
Beyond the international financial turbulence, this crisis reveals a fragility directly linked to the unique construction of a monetary union without a political union.
While the diagnosis is now widely shared—insufficient budgetary discipline, incomplete macroeconomic oversight, overly decentralized banking supervision—opinions differ on how to address these issues.
Should rules and sanctions be strengthened? Should a few more steps be taken toward federalism? How should the unresolved problem of burden-sharing during crises between countries and between the public and private sectors be addressed?
Hindered by the complexity of the decision-making processes, the governments of member states sometimes appear lagging behind the market and out of sync with the federal and independent institution that is the European Central Bank.
Nevertheless, they have made every effort, from the aid plan for Greece to the future financial stability mechanism, and the European Financial Stabilization Fund. They are also preparing for a complete overhaul of budgetary and macroeconomic supervision, the details of which need to be defined.
However, countries with the most strained public finances are still showing signs of fragility.
The Eurogroup granted additional aid to Portugal, the third country to request a bailout plan since 2009, while the IMF provided additional “cash facilities” to Ireland.
The debate remains open around Greek debt amid potential restructuring and pressing demands for privatizations.
In this context of persistent divergence among national economies, the German economy has now returned to its pre-crisis level and may want to position itself as the most effective model, while the pace of French growth seems to be accelerating.
What is the value of the paradigm of a Franco-German relationship playing a leading role in the zone under these conditions?
Should we believe in the scenario of a core group (via federalization) when this core might face difficulties supporting the activity of peripheral countries? Is further expansion of this same eurozone still possible? How can we ward off the scenario of a complete breakup and a disintegration dynamic threatening to undo everything the European Union has achieved so far?
The “Eurosystem,” whose references primarily return to the market sphere, was originally built to be independent of all powers.
Given the particular institutional situation of the eurozone, who in 2011 can be the guarantor of “hierarchical trust”?
Has the crisis not effectively blurred the line between monetary and political power?
The European Parliament, strengthened by the Treaty of Lisbon, intends to fully make its voice heard and influence the future of the euro.
What is the best lever to strengthen the democratic legitimacy of the eurozone and thus the confidence of European citizens in their single currency?
