Keywords:Eurozone, Euro, Fiscal discipline, Reform of public finance, Bailouts, Default, Bankruptcy
It is argued the current eurozone crisis is neither new nor surprising. Fiscal discipline in the eurozone was weak from its creation in 1999, but ongoing economic prosperity limited the damage. Economic recession deepened the impact of crisis on public finance and pushed some eurozone countries to the edge of bankruptcy. Options available now are costly and painful: foreign bailouts, cuts to expenditures, higher revenues and some combination of the three. They may be conducted both inside and outside the eurozone. If eurozone problems are not solved, financial markets may turn down the euro as a currency, possibly marking the beginning of Euro-disintegration.
Key words: Eurozone, Euro, Fiscal discipline, Reform of public finance, Bailouts, Default, Bankruptcy.
JEL: G01, P16, P51.