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This article examines two distinct types of narratives
prevalent in academic writing and popular press regarding the causes of the
crisis in Europe. The first type, a morality tale, attributes the crisis to
profligate southern states that refused to abide by the strictures of the
Stability and Growth Pact. The second type is focused on the structural reasons
for the crisis, emphasizing the nature of the European Union as a non-optimal
currency area, and the euro as a factor in the creation of trade imbalances and
competitiveness problems within the euro zone. Each type of narrative suggests
a different type of solution. The morality tale tends to see austerity measures
and stricter fiscal discipline as the solution, while the structural narratives
suggest anything from banking, to fiscal, to full political union or, by
contrast, breakup as the potential ways out. The article argues that European
politicians have focused on the morality tale and this in turn makes the
structural solutions required for the survival of the euro politically
unworkable. The article further argues that the European Commission has used
the crisis as evidence of the dire consequences following from lack of reforms.
Instead of profligate citizens the Commission sees inefficient states that are
potentially creating impediments to growth. Notably, the Commission’s vision of
desirable reforms for the purposes of growth reach well into the basic
structures of European welfare state, on social policy, pensions, and health
care, but this time under the guise of a fiscally mandated adjustment that
should be binding on Member State through the process of economic policy
coordination.
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