Central banks in the Eurozone have accumulated claims and debts between themselves. These "Target 2 imbalances" substituted for the outstanding between private entities, in particular for the interbank loans and there is no mechanism to settle them. Should the Eurozone burst, they would become due.

Europeans face a fourfold crisis: a sovereign debt crisis, a banking crisis, a competitiveness crisis and a crisis of governance. CEPII's first Policy Paper highlight the key issues that need to be addressed for a comprehensive solution to be found.

In December 2011, the ‘six pack’ introduced a new surveillance procedure of macroeconomic imbalances at the European level. However, the ten indicators used for the early warning of imbalances do not seem much more relevant than the simple indicator of the current account balance.

On 12 of September, the European Commission (EC) has unveiled its proposal that shifts banking supervision to the European level, giving sweeping supervisory powers to the ECB. 

The Lettre du CEPII No. 324 shows that internal devaluation strategies in Latvia and in Ireland produced only limited adjustments at the price of considerable social costs.

The Eurozone is facing three intertwined and mutually reinforcing crises: a sovereign debt glut, banks’ financial fragility and dampened growth prospects. Further fiscal and political integration seems to be the only way to address these issues.

In France, like in most Western European countries, the debate on competitiveness is entirely focused on manufacturing industries. The case of services sectors remains in the shadows, even though they undoubtedly are an important source of employment and constitute a clear comparative advantage.

The eurozone crisis presents a risk for Asian economies. Mainly, the crisis could spread through trade and various financial channels.Yet, economic impact of spillovers is not the only reason why Asia has a specific interest in the survival of the euro.

In his new book, Michel Aglietta explains how Europe reached a critical point and suggests solutions to the challenges met by the eurozone.

The European Union has always relied first and foremost on a gradual economic integration process. The current euro-zone crisis casts serious doubts on the benefits of such integration. Assessing its economic benefits is therefore central to measuring the overall benefits the European Union (EU) provides to its citizens.