Crisis in the Eurozone

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Verso Books, Sep 11, 2012 - Political Science - 268 pages
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First, there was the credit crunch, and governments around the world stepped in to bail out the banks. The sequel to that debacle is the sovereign debt crisis, which has hit the eurozone hard. The hour has come to pay the piper, and ordinary citizens across Europe are growing to realize that socialism for the wealthy means punching a few new holes in their already-tightened belts.

Building on his work as a leading member of the renowned Research on Money and Finance group, Costas Lapavitsas argues that European austerity is counterproductive. Cutbacks in public spending will mean a longer, deeper recession, worsen the burden of debt, further imperil banks, and may soon spell the end of monetary union itself.

Crisis in the Eurozone charts a cautious path between political economy and radical economics to envisage a restructuring reliant on the forces of organized labour and civil society. The clear-headed rationalism at the heart of this book conveys a controversial message, unwelcome in many quarters but soon to be echoed across the continent: impoverished states have to quit the euro and cut their losses or worse hardship will ensue.
 

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Contents

A general squeeze
22
Dealing with failed banks
35
How to create a global crisis
42
Political economy of alternative strategies to deal with the crisis
59
1
75
4
83
16
96
Austerity and further liberalisation
113
Appendix 2B Construction of aggregate debt profiles
147
Appendix 2C Decomposition of aggregate demand
153
3
155
Institutional malfunctioning
166
Class interests and institutional fixes
180
Restrengthened links between banks
193
The social and political significance of breaking up
207
Cutting the Gordian knot
215

The spectre of default in Europe
126
Argentina and Russia
136

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About the author (2012)

Costas Lapavitsas is a Professor of Economics at the School of Oriental and African Studies, University of London. He is a member of Research on Money and Finance (RMF). He is the lead author of the new RMF report "Breaking Up? A Route Out of the Eurozone Crisis." His previous publications include Social Foundations of Markets, Money and Credit and Political Economy of Money and Finance.


From the Trade Paperback edition.

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