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Abstract

On the basis of a brief reconstruction of the causes and consequences of the euro crisis, this chapter explores whether the new euro regime, insisting on fiscal austerity and supply-side reforms, could have prevented the crisis and whether it is able to deal with its disastrous economic and social impact. A comparison with the likely impact of transfer-based Keynesian reflation suggests that, in both cases, economic success is uncertain, while both approaches are likely to produce severely negative side effects. In light of such dismal policy choices, attempts to politicize European election campaigns are more likely to provoke unmanageable political conflict than to overcome the input-oriented democratic deficit of European economic governance.