It is hard to hold the course in the middle of a storm, but European policymakers need to if they want European integration to succeed. The sovereign debt crisis is a serious challenge, which requires a strong and coordinated effort by all involved to finally put it behind us.
Surviving the storm will be of little consequence if the euro area finds itself trapped in the perpetual winter of low growth. Germany may be expanding at record speed right now, but it wasn’t so long ago when it grew much more slowly—just 1.5 percent per year between 1995 and 2007. In contrast, Sweden grew by 3 percent a year and the United States by 2 percent during the same period.
Many experts fear that without reforms, growth in Germany could drop even lower in the next 5‑10 years and beyond when global trade cools again. The situation is worse in the countries that currently find themselves in the eye of the storm.
Filed under: Advanced Economies, Economic Crisis, Europe, growth, IMF, International Monetary Fund | Tagged: currency union, Economic and Monetary Union, economic crisis, economic integration, equity capital, euro area, euro area Art IV, Europe, European financial stability framework, European Union, financial sector, Germany, global trade, governance, government debt, growth, integration, labor market, policymakers, reforms, sovereign debt, Stability and Growth Pact, structural reforms, surveillance, Sweden | 17 Comments »