ABSTRACT
The current crisis has distant origins. The crisis revealed serious institutional and political flaws in Eurozone governance. Subsequent policy errors deriving from theoretical prejudices, economic interests and political myopia, combined to implement short-sighted, economically damaging and politically divisive policies. The crisis also revealed the risks of having a central bank that, formally independent, interferes in political questions, with significant distributional consequences for creditor and debtor countries, and for different social groups within countries. The severity of the crisis and the risks of Economic and Monetary Union disintegration called for the adoption of partial and belated reforms of the community's institutions. For long-term sustainability, the European project needs a multilevel policy. The Southern European leaders have proved incapable of joining forces to counter Germany's dogmatism. In many cases, centre-left politicians have eagerly embraced austerity to prove their bona fide to the markets. In the process of building a European 'neoliberal consensus', the shift towards austerity in France was decisive.
