A less punishing, more forgiving approach to the debt crisis in the eurozone

The debt crisis that hit the eurozone last year forced European leaders to develop new solutions to deal with the crisis. In this CEPS Policy Brief, Paul De Grauwe asserts that these solutions have been misguided by the idea that sanctions should be imposed everywhere in the system. He argues that too much emphasis was put on designing punishment mechanisms to deal with the crisis and to prevent future ones and that a greater role should be given to forgiveness.
Paul De Grauwe is Professor of Economics at the University of Leuven and Senior Associate Research Fellow at CEPS.