I recently took a class on financial regulation, Dodd Frank, and the recent US financial crisis and I feel that I gained a really in depth understanding of those topics.
However, I feel as though I dont know as much about the Euro crisis. I have trouble understanding the key underlying issues and events that led to the crisis and my understanding is probably tainted by common misconceptions. Where is the best source to learn about the history and causes of the Euro Crisis? I work in finance so I would prefer a detailed and technical guide to an accessible one made for the masses. Also, I'm looking for the mainstream view. Not looking for goldbug Austrian stuff.
This should keep you busy for a bit:
http://www.scribd.com/doc/74335711/Hayman-Nov2011
http://www.slideshare.net/franciscoragolta/hayman-capital-kyle-bass
You could say I'm a Kyle Bass fanboy.
Me too
You wouldn't happen to be Greek, would you?
Your vote counts!
If you want to understand the current Euro crisis you have to do a bit of research on the introduction of the Euro as a currency (read up on the previous experience of ERM and the stability pact). Most nations in the Western world have had to deal with the aftermath of the American financial crisis (which you seem to have covered). To understand why countries like the UK, Sweden and Norway (and even the US) were able to cope relatively easily while countries like Ireland, Greece, Spain, Italy and, according to Merkel, even France are struggling to deal with the impact of the Great Recession you need to understand "how" the Euro is a different type of currency than the Dollar, Pound Sterling or Yen.
Any individual country in the Eurozone has fewer policy tools to deal with the financial crisis than it would have had, if it had it's own currency. Furthermore the Eurozone as a whole has fewer policy tools as a block than a single country like the UK has or the US has on a federal level. This is because with the introduction of the Euro / single currency, the member nations have given up control of their monetary policy to a central institution, but the block also lacks the ability to make fiscal policy decisions on a EuroZone wide level (i.e. government expenditure, taxation, issuance of debt on a pan EuroZone level, etc...).
The Economist on Sovereign Debt http://www.economist.com/blogs/freeexchange/2012/04/sovereign-debt
Policy makers can do things on a national level in the US that they can't on a Europe wide basis, e.g. expand government expenditure US wide, or issue debt at a Federal level to fund investment across the country. You can't do this in Europe. There is no pan European government borrowing and decisions to provide a fiscal stimulus are not just hampered by ideology, but also because each government is answerable to it's own national constituents and special interests and not to a Europe wide constituency. So you have the situation in which Germany's leader is telling nearly every other country, even France! to shape up (who's left?).
Merkel on France... http://www.ft.com/intl/cms/s/0/549a8222-b6ff-11e1-bd0e-00144feabdc0.htm…
To give another example, during the early years of the EuroZone, Ireland was growing at a much faster pace than Germany, but it had to deal with the low interest rate environment due to Germany being such a big part of the EuroZone economy. Same currency = same monetary policy. This meant that the Irish government couldn't cut taxes for fear of causing inflation, which they ended up getting anyway in their real estate markets / asset prices.
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