Europe’s Way Out
Ultimately, European economic union requires a reduction in structural and institutional heterogeneity (especially in labor markets) among its members. But the eurozone faces a short-term problem that is more Keynesian in nature, and for which longer-term structural remedies are ineffective at best and harmful at worst.
https://prosyn.org/CiIj16g
CAMBRIDGE – It seems that austerity is out of fashion in the eurozone – at least for the moment. The European Commission has given Spain, France, and the Netherlands more time to comply with the European Union’s 3%-of-GDP deficit ceiling. Even German government officials now concede that something more than fiscal belt-tightening is needed to revive the economies of the eurozone periphery.