Why the euro crisis is far from over

Abstract

Since the third Greek bailout in 2015, concerns about the long-term viability of the European single currency have diminished. For all the progress seen in the past decade, however, the structural and institutional fragilities underlying the euro remain unaddressed. This paper sets out these flaws in the context of past and proposed future reforms, including the current debate around an effective burden-sharing mechanism. Ultimately, the success of the single currency will depend on willingness to cede political sovereignty by member states, and continued popular support for the project and associated social cohesion across the euro region. As such, the crisis may be dormant at the moment but, until these issues are addressed, it is far from over.