Abstract

The Eurozone crisis is part of the crisis of financialisation that began in the USA in 2007. However, the crisis has taken a particular form in Europe because of the role of the euro as international reserve currency in competition with the dollar. By the same token, financialisation in the Eurozone has rested on a division between core and periphery generated by diverging competitiveness. The policies of austerity, liquidity provision, and bail-out loans do not deal with the underlying causes of the crisis and exacerbate the imbalances of the monetary union. An important outcome is increasing fragmentation of banking in the Eurozone pointing toward a break up of the monetary union in the future.

Costas Lapavitsas teaches Economics at the SOAS . He works on the political economy of money and finance, on the history of economic thought and on the Japanese economy. He has published widely and his latest books are ‘Crisis in the Eurozone’ (Verso, 2012), and ‘Financialised Capitalism’ (Verso, 2013, forthcoming).