The multiple attempts to restore confidence in the eurozone over the 18 months that have passed since the first Greek rescue in May 2010, have clearly failed. Indeed, following each round of emergency measures agreed by the eurozone summits, matters have turned for the worse. This contribution by Stefano Micossi exhorts the leaders of the eurozone to go back to the drawing board and overcome their political disagreements on how to proceed. Arguing that straitened policies in all the member states will not suffice, he insists on the need for an adequate provision of liquidity – as large as needed in order to stop the ongoing currency run. If this cannot be agreed upon, Micossi warns that the eurozone will break down, with gigantic economic dislocations.
Stefano Micossi is Director General Assonime, Visiting Professor at the College of Europe, Chairman CIR Group and member of the CEPS Board of Directors.