Euro Marriage in Peril
By Nouriel Roubini
[The euro zone's union] proved to be a marriage of shared bank accounts and credit cards in which one side over-saved and the other over- spent.
On that day, to the surprise of my interlocutor and global investors, the E.C.B. president, Mario Draghi, made his famous declaration that the bank was prepared to do “whatever it takes” to preserve the euro. That led to the creation of outright monetary transactions, known as O.M.T., and saved the euro zone.
Today the risks for the euro zone are much lower. Still, 2013 has been a volatile year. The crisis in Cyprus showed that the euro zone remains deeply divided over how to resolve the crisis in the periphery; inconclusive German elections created new uncertainties in the euro zone’s core; and the Italian government teetered on the verge of collapse more than once.
Read full article as published in The New York Times
Nouriel Roubini is a Professor of Economics and International Business and the Robert Stansky Research Faculty Fellow.
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