Introduction
The key point of my talk is that EMU has two very different types of problems, depending on whether you think of the short or the long term.
- The short-term one is a combination of excessively low growth, massive sovereign debt because of the links between weak banks and governments, and no way out (weak banks increase sovereign debt, which translates into weak banks).
- The long-term one is that two very different types of economies were integrated into EMU, without a political mechanism that compensates for the negative effects of these differences.
