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Yiannis Kitromilides and Thanos Skouras: “Greece and the Eurozone Crisis: Two Narratives”

The ‘Greek story’ is in accord with and conveniently lends support to the widely-held view, especially in northern Europe, according to which the euro crisis is due to fiscal imprudence and excessive sovereign debt. The alternative and correct narrative recognizes the financial origin and the market malfunctioning, specifically in banking and construction, that caused the crisis. Moreover, it attributes the crisis to the Eurozone’s flawed architecture, which lacks the appropriate tools and institutional provisions to manage such shocks and correct market imbalances. On the plane of morality, the alternative narrative has also quite different implications from those widely believed and, instead of stigmatizing the debtor countries, it exposes the self-seeking stance of the creditor countries. Finally, it contends that the solution to the crisis is not to be found in concentrating on austerity and debt reduction but in openly recognizing the euro’s flawed architecture. What is needed is to take the necessary steps in the direction of completing the Eurozone’s unfinished construction and building a federal European state.

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