Outlines the current problems facing the euro zone, focusing on the fundamental weakness of a monetary union, and how countries such as Spain can be pushed to insolvency by the financial markets as they issue debt in a currency over which they have no control. The policy solution is to allow the European Central Bank to act as the lender of last resort in the market for government debt.
Authors:
Publication type:
Policy brief
Date published:
Saturday, December 1, 2012