• Peter Alfons SCHMID Catholic University Eichstätt-Ingolstadt, Germany


The Euro Zone (EZ)’s economies are under great stress since last decade’s financial crisis. Diverging interest rates, high debt burdens and sluggish growth in several member countries led to various rescue activities. Nevertheless, financial markets have still not calmed and the break-up of the EZ is discussed openly. Contrary to the popular belief I show that the Euro itself has been a success story so far but that the EZ suffers under a debt crisis and huge economic imbalances. An overhaul of the EZ’s institutional framework is necessary.


[1] Barkbu, B., Rahman, J., and Valdés, R. et al. 2012. Fostering Growth in Europe Now. IMF Staff Discussion Note 06/18/2012.
[2] Bergheim, S. 2007. Spain 2020 – the success story continues. DB Research Current Issues 09/11/2007.
[3] Bräuninger, D., and Majowski, C. 2011. Labor mobility in the euro area. DB Research EU Monitor 85 09/20/2011.
[4] Boysen-Hogrefe, Jens. 2011. Für einen Schuldenschnitt und gegen den Rettungsschirm? Argumente auf dem Prüfstand. Kiel Policy Brief 29.
[5] Deo, S., Donovan, P., and Hatheway, L. 2011. Euro break-up: the consequences. UBS Investment Research 09/06/2011.
[6] Deutsche Bundesbank. 2012. Monatsbericht Juni 2012. Deutsche Bundesbank.
[7] The Economist. 2003. Sick man walking: Germany needs a lot more reforms than those in this week’s modest deal. The Economist:
[8] EEAG. 2012. The EEAG Report on the European Economy. CESifo.
[9] Europäische Zentralbank. 2012. Monatsbericht Juni 2012. Europäische Zentralbank.
[10] Feldstein, M. 1997. The Political Economy of the European Economic and Monetary Union: Political Sources of an Economic Liability. Journal of Economic Perspectives 11(4): 23-42.
[11] Hanson, S., Kashyap, A.K., and Stein, J. 2010. A Macroprudential Approach to Financial Regulation. Paper prepared for the Journal of Economic Perspectives.
[12] Homburg, S. 2012. Anmerkungen zum Target2-Streit. ifo Schnelldienst 16/2011: 46-50.
[13] Kenen, P.B. 1969. The Theory of Optimum Currency Areas: An eclectic view in: Mundell, R. A. and Alexander K. Swoboda (Eds.), Monetary Problems of the International Economy, University of Chicago Press: 41–60.
[14] Keynes, J.M. 1946. The Balance of Payments of the United States. The Economic Journal 56(222): 172-187.
[15] Krugman, P.R. 2000. Currency Crisis. The University of Chicago Press.
[16] Klodt, H. 2011. Ist die Währungsunion zu retten? Für einen anreizeffizienten Krisenmechanismus. Kiel Working Paper 1690.
[17] Mayer, T., Möbert, J., and Weistroffer, C. 2011. Makroökonomische Ungleichgewichte in der EWU und das Eurosystem. ifo Schnelldienst 16/2011: 31-38.
[18] Milbradt, G. 2011. Die EZB auf der schiefen Bahn: Target-Salden und Eurokrise. ifo Schnelldienst 16/2011: 39-45.
[19] Mundell, R.A. 1961. A Theory of Optimum Currency Areas. The American Economic Review 51 (4): 657-665.
[20] Neubäumer, R. 2011. Eurokrise: Keine Staastsschuldenkrise, sondern Folge der Finanzkrise. Wirtschaftsdienst 91(12): 827-833.
[21] Schubert, M. 2012. Economics aktuell: Bundesbank: Target2-Saldo sinkt leicht auf 727 Mrd. Euro. Commerzbank Economic Research 08/07/2012.
[22] Shambaugh, J.C. 2012. The Euro’s Three Crises. BPEA Paper 03/12/2012.
[23] Sinn, H.-W. 2011. Die europäische Zahlungsbilanzkrise: Eine Einführung. ifo Schnelldienst 16/2011: 3-8.
[24] Sinn, H.-W. 2012. Die Target-Kredite der Deutschen Bundesbank. ifo Schnelldienst 65: Special Edition March 2012.
[25] Subacchi, P., and Pickford, S. 2012. Broken Forever? Addressing Europe’s Multiple Crises. Chatham House Briefing Paper 03/27/2012.
[26] Sweeney, P. 2008. Ireland’s Economic Success: Reasons and Lessons. Dunedin.
[27] Thompson, D. 2011. Fiscal Union Cannot Save the Euro. The Atlantic: archive/2011/11/fiscal-union-cannot-save-the-euro/249093/.
*** The Economist. 2011. Greek Americans: Which American states enjoy the biggest fiscal transfers? The Economist:
How to Cite
SCHMID, Peter Alfons. THE CRISIS OF THE EUROPEAN MONETARY UNION. Theoretical and Practical Research in the Economic Fields, [S.l.], v. 3, n. 2, p. 109-120, june 2017. ISSN 2068-7710. Available at: <>. Date accessed: 22 jan. 2022.