© Peter Vanden Houte
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I believe that it is a combination of both. There are some economic issues that lead to the Eurozone crisis in the sense that private debt in some countries, and especially in peripheral countries like Spain and Ireland, either exploded or rose very substantially after the start of the monetary union. The reason behind that is the sudden convergence of interest rates with very low German interest rates. Due to the fact that the ECB sets interest for the whole of the monetary union, there is the possibility that it will be too low for some countries and too high for others. This is what happened during the crisis - we saw an overheating in the peripheral counties because at that moment the interest rates were too low for them. Thus, the run-up in debt at the start of the monetary union and the loss of competitiveness is an economic phenomenon.
However, we could argue, of course, that the politicians should have considered some measures to avoid an overheating in the peripheral countries, which led to the problems we currently have. Moreover, the construction of the monetary union itself was probably not optimal. Even though it started with a common central bank, it overlooked the necessary aspects such as a common economic and fiscal policy. Therefore, the lack of leadership is definitely to blame for the fact that not all of the needed reforms were implemented.
The Guardian has conducted a poll among six countries: Poland, Italy, France, Germany, UK and Spain, which shows that Euroscepticism and mistrust in the EU has rocketed not only in the Eurozone countries but in Europe overall. Therefore, don't these developments indicate an escalation of the crisis to a political issue?
That is surely a problem for the stability of the Eurozone as with the rising unemployment in some of the countries in the region, it is certain that the democratic support for the Euro area might drop. Moreover, considering that the current mix of policies definitely not working in terms of improving the economic situation within the Eurozone, people at a certain moment begin to oppose to the European construction as they believe it is the origin of the problem.
Having said that, I think that to some extent the Euro area and the European Union as a whole is a bit of a scapegoat within the individual countries. The reason behind that is that politicians lack some courage to introduce needed reforms. To be clear, some countries like France and Spain are currently struggling not because of the Eurozone or the Euro. Moreover, regardless if they were not in the Euro area, they still would have experience problems as their competitiveness lags in comparison to other countries in the rest of the world like China or the US. Thus, sooner or later some of the Eurozone countries would have had to introduce certain reforms to improve their competitiveness as well as boost growth. Taking into account that now these reforms are not easy to implement the Euro is blamed.
To sum up, I would say that indeed people are losing faith in the European constitution as well as the Euro, which threatens the stability of the Eurozone. What I mean by that, in case during the next elections in countries with strong Euroscetpicism politicians state that they are in favour of leaving the Euro area, the growing share of the population would vote for these politicians. However, I consider it to be rather wrong to blame the Euro for the homemade problems that would have been tackled anyway.