ABSTRACT
This chapter looks at the euro crisis in detail. In the decade between the introduction of the euro and before the outbreak of the euro crisis, the debate about whether Europe was an optimum currency area had all but disappeared. Economic growth was strong, especially in the euro-area periphery, and living standards in these countries were increasing robustly. After a number of data revisions, it now seems that Greece has neither prior to its accession to the euro area nor after the introduction of the euro actually recorded a public deficit of less than 3 percent of gross domestic product (GDP). The chapter starts with the first loans to Greece in the spring of 2010 and work through the way new funds and facilities were created. The euro crisis began in early 2010, when the newly elected Greek government was forced to revise upward data on the public deficit and the public debt level.
