Public Policy and Foreign Policy in the European Union in Relation to the Euro Crisis

More about the book

The essay examines the Eurozone's remarkable performance in its first decade, highlighting the European Central Bank's success in stabilizing inflation. However, it argues that the end of the Great Recession triggered the Euro crisis, revealing significant flaws in the banking system. Prior to the crisis, Eurozone banks engaged in excessive borrowing, influenced by a perceived low-risk environment due to rising asset prices. The subsequent decline in asset values forced these banks to cut back on their leverage, exposing vulnerabilities within the financial sector.