The mechanisms behind the prolongation of the European debt crisis: the Eurosystem’s “hidden rescue mechanism” and the rapidly growing burden on Eurozone countries
September 19, 2012
The European debt problem has given rise to much confusion, but a decisive worsening of conditions has been avoided and the crisis has become protracted. This has been made possible by the existence of a “mechanism” that semi-automatically supplies liquidity to financial institutions in Eurozone countries, through the Eurosystem.
－ What mechanisms lie behind this?
－ How big is the problem?
－ Is the situation sustainable?
What issues should the Eurozone countries address?
－ How should the Spanish problem be addressed?
－ How can the crisis be prevented from expanding and spreading further?
－ Handling the Greek problem
1．The hidden mechanism behind the rescue of countries in difficulties
2．The latent burden on Eurozone countries that has been allowed to grow without debate
3．An evaluation of the ECB’s policy management
4．The outlook for the future