The Greek Crisis and the Crisis in Eurozone’s Governance

Abstract

The evolving debt crisis in the Eurozone creates continuing uncertainty for the future of Eurozone. The European economic crisis and particularly the Greek economic crisis is a result of a combination of weaknesses in the governance of the Eurozone. The aim of this article is to analyse the Greek economic crisis through the prism of Eurozone’s Governance. First, we study the structural and functional responsibilities and deficiencies of the governance of the Eurozone. Further, we discuss the effect of Eurozone’s governance on the emergence of the Greek crisis. We also analyse some of the dimensions of the management of Greek crisis in the Eurozone. These are: weaknesses of European decision-making mechanism, the major shortcomings of the European leadership, and the emergence of economic nationalism and chauvinism in some member states, the risks of transmission of the crisis in the entire Eurozone area and, finally, excessive reactions of the financial markets and rating agencies. In conclusion, we discuss the reasons for the failure of the Greek crisis management.