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Out of the box #2: Back to austerity. Euro sovereign crisis vol 2?

The hardships brought about by Covid and the Ukraine war initially fostered political unity across Europe. In this article however, I will argue that fragmentation may soon regain prominence as liquidity diminishes, labor markets weaken, and governments face the need to implement tighter fiscal policies. These circumstances create a fertile ground for the resurgence of the zero-sum debtor/creditor conflict that characterized the 2010s.
2023-05-01

The hardships brought about by Covid and the Ukraine war initially fostered political unity across Europe. In this article however, I will argue that fragmentation may soon regain prominence as liquidity diminishes, labor markets weaken, and governments face the need to implement tighter fiscal policies. These circumstances create a fertile ground for the resurgence of the zero-sum debtor/creditor conflict that characterized the 2010s.

In stark contrast to the recent years’ accomplishments on the European political scene, the sovereign debt crisis of the 2010s remains a haunting memory. The swift transformation from a fragmented Europe, divided by regional blocs and national interests, to a (partially) united supranational entity with cohesive (and somewhat successful) policy responses to a global pandemic and a devastating war on the continent took many by surprise, considering the challenges faced during the 2010s.

The hardships brought about by Covid and the Ukraine war initially fostered political unity across Europe. In this article however, I will argue that fragmentation may soon regain prominence as liquidity diminishes, labor markets weaken, and governments face the need to implement tighter fiscal policies. These circumstances create a fertile ground for the resurgence of the zero-sum debtor/creditor conflict that characterized the 2010s.

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