Woes of Euroland’s Financial Integration

Abstract

As these lines are written at the end of 2010, Germany is leading euroland’s rebound, helped by the global manufacturing cycle, a restructured economy and (till mid-2010) a less overvalued euro. France and Italy have strengthened, but the financial crisis in euroland’s periphery has been worsening and continues unabated. Ireland ruined its economy by providing unqualified support to its mismanaged banks; Spain and Portugal are falling back into stagnation; and Greece is suffering a recession.