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Authors:
Marie-Jose Rinaldi-Larribe (EDHEC - Business School)
Published in:
2016
Version:
6-Oct-2016
Revision date:
03-Nov-2016
Length:
15 pages
Data source:
Published sources

Abstract

We know that countries had to meet the Maastricht criteria in order to be able to adopt the euro, and except for a few countries, they indeed managed to fulfill the criteria. But it has also been highlighted in the literature that the eurozone countries did not necessarily fulfill the criteria set by the Optimum Currency Area theory. Nevertheless, business cycles have largely converged due to the existence of the Maastricht criteria until 2003-2004; after that date we start observing diverging trends across euro area members, which greatly explains the development of the financial and economic crisis in the area. This case presents the reasons for the Eurozone crisis, as well as reforms that were made. The question is now: is it enough? What is the way ahead for the eurozone?

Topics

Euro crisis; European Union (EU); Optimum currency area; Euro currency; Real convergence criteria; European integration; Current account balance; European Stability Mechanism; European Central Bank
Locations:
Other setting(s):
2008-2016

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