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The Euro Crisis and Its Aftermath$
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Jean Pisani-Ferry

Print publication date: 2014

Print ISBN-13: 9780199993338

Published to Oxford Scholarship Online: May 2014

DOI: 10.1093/acprof:oso/9780199993338.001.0001

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PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 12 May 2021

The Perfect Culprit

The Perfect Culprit

(p.52) Chapter 7 The Perfect Culprit
The Euro Crisis and Its Aftermath

Jean Pisani-Ferry

Oxford University Press

Greece was the first country to seek financial assistance from Europe and the International Monetary Fund (IMF) in 2010. For this reason, public opinion in Europe, and especially in Germany, for a long time saw the Eurozone crisis through the Greek prism. Indeed, Greece was the perfect culprit: after failing to join the euro during its launch in 1999 and having narrowly qualified in 2001, the country immediately began to exceed the budgetary deficit limits it had promised to stick to. It attempted to cover up the true state of its public finances, and was then forced to ask for help after being exposed. For Germany, the Greek crisis seemed to offer all the features of a classical tragedy whose script had been written 20 years ago. To stave of its nightmare scenario, Germany had during the Maastricht negotiations demanded guarantees and safeguards in the form of the no bail-out clause, the prohibition of monetary financing of public deficits, the obligation to avoid “excessive” public deficits, and monetary sanctions. None of this was sufficient to avert disaster – but blaming the Eurozone’s difficulties only on a failure to implement an otherwise adequate surveillance framework would, however, be wrong.

Keywords:   Greece, Ireland, Europe, International Monetary Fund, Germany, euro, public finances, public deficits, Stability Pact, euro crisis

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