Skip to content
Technology & Innovation

The “Euro Trap”

Paul Krugman writes that the Greek crisis demonstrates the dangers of nations putting themselves in a “policy straitjacket.”

“Is the euro itself in danger? In a word, yes,” writes Paul Krugman. “If European leaders don’t start acting much more forcefully, providing Greece with enough help to avoid the worst, a chain reaction that starts with a Greek default and ends up wreaking much wider havoc looks all too possible.” He says that the crisis demonstrates the dangers of putting yourself in a policy straitjacket. “When they joined the euro, the governments of Greece, Portugal and Spain denied themselves the ability to do some bad things, like printing too much money; but they also denied themselves the ability to respond flexibly to events.”


Related

Up Next
On Monday, Republicans voted to prevent financial reform legislation from moving to the Senate floor for debate. The Democrats’ motion to bring about cloture—which would end the Republicans filibuster of […]