Volume 6 Issue 1 October 2018
Book Review:
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During the Eurozone crisis, the message from European policymakers was abundantly clear: that the euro fostered many of the recent problems, or at least was a strong contributor to the high budget deficits at the heart of the crisis, and that there were no alternatives to the bailout packages. Successive large transfers of credit from Germany to the debtor countries were therefore justified along these lines, in exchange for harsh austerity, overly tight monetary policy, and structural reforms. In Europe’s Orphan: The Future of the Euro and the Politics of Debt, Martin Sandbu (of the Financial Times’ ‘Free Lunch’ fame) perceptively argues that this accepted orthodoxy is in fact at odds with history and the evidence from this period. Nothing is wrong with the euro itself, he suggests. It is rather the policies of the governments of the Eurozone and the European Central Bank that were and remain wrong.
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