The international monetary system after the Euro Area sovereign debt crisis
The present chapter looks into global lessons from the Euro Area crisis. We have rediscovered that international fi nancial markets are and will remain, inherently unstable. In particular, regions characterized by a high degree of economic and monetary integration fi nd that they need ever-deeper integration. 1 Section 2 kicks off the chapter by asking what would have been the implications of a successful euro for the future of the international monetary system. The next section argues that the lessons from the Euro Area crisis must start with a proper diagnosis of what went wrong. The proposed diagnosis is more nuanced than just asserting that the euro was a mistake doomed to failure. Section 7 starts from this diagnosis and outlines a number of possible implications for the Euro Area crisis. The last section brings together the main conclusions.