Introduction: the European crisis in the transatlantic context

The financial and economic crisis of the European Union and even more so of the Eurozone, the area of countries that have adopted the euro as their common currency, was as much unforeseen as it has been devastating. Eurozone public finances have been under extreme strain and the fate of the common currency was for a while uncertain. In the attempt to save the euro, deep fiscal austerity was imposed in the countries that had the most vulnerable and unbalanced economies. The results of austerity have been mostly counterproductive for public finances, with public debts increasing in the countries of the European south. The onset of the Eurozone crisis was the outcome of transatlantic contagion. The crisis started in the United States and was exported to the Eurozone through different channels. Yet, the construction of the Eurozone and its internal situation were such that, once the contagion took effect, the Eurozone crisis took on its own momentum and distinctive character. The crisis has been dangerous and painful internally, while worrying and potentially destabilizing for the rest of the world. Since the economies on both sides of the Atlantic are deeply integrated both financially and productively, while their two currencies are tightly connected, the Eurozone crisis was particularly worrying for the United States. These troubles were largely unexpected since the common currency and European integration were thought to give the economies of member countries greater resilience to crises. The institutional architecture of the Eurozone was carefully and rationally planned, with an apparently proper allocation of roles and distribution of policy-making between the involved parties. Monetary policy was put under the responsibility of the European System of Central Banks and in particular the European Central Bank and had the goal of dealing with symmetric shocks that could hit the Eurozone in its entirety. Since shocks are often asymmetric-hitting and influencing individual countries in a distinct way-fiscal policies were left in the hands of the national authorities in order to give them the possibility and power to intervene in a flexible way. Yet, these solutions proved ineffective when the crisis started in 2008. This book aims at giving a complex answer to the puzzling inability of the Eurozone to deal with the crisis. Through the lens of different disciplinary perspectives, and from a transatlantic perspective, the essays in this volume consider the nature of the crisis, the failures of Europe in its attempts to deal with it, and possible ways forward.