Euro Crisis – By Prof Ghosh, Associate Prof. at MDAE

Prof Ghosh, Associate Professor at MDAE, was hosted by three top undergraduate colleges in Delhi – St Stephen’s College on 21st September, LSR on 22nd September and Miranda House on 23rd September.

In his talk, Prof. Ghosh gave an overview of the crisis unfolding in Europe since 2007/08, when the subprime mortgage crisis in the US spilled over into the European interbank market and exposed many flaws in the conception and execution of the Euro project since 2000.

He described the different dimensions of the crisis –

  1. the output dimension
  2. the unemployment dimension
  3. the financial/debt markets dimension
  4. the competitiveness dimension
  5. the balance of payments dimension.

He then presented a historical perspective (going back to at least 1990) enabling the students to understand the tremendous economic distress that the GIPSIC countries (Greece, Italy, Portugal, Spain, Ireland and Cyprus) are presently undergoing. Whereas Germany has been commonly portrayed (in the media, especially) as the “winner” of the Eurozone and its success has been claimed to have come at the expense of the GIPSIC countries, he presented a different perspective that highlights the pre-2007 excesses of the GIPSIC countries at a time when the German economy was in recession, as the main cause of the present condition of the GIPSIC countries.

The post-2010 actions of the ECB were also faulted as having worsened the crisis that began in 2007 and a set of proposals were presented for addressing the situation in the Eurozone. These include:

  1. the imposition of hard budget constraints
  2. the restructuring of debt
  3. the recapitalization of banks
  4. exit by some GIPSIC countries followed structural reform and then re-entry.

To view the detailed presentation please click here.

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Date(s) - 21/09/2015 - 23/09/2015
11:00 am - 12:00 pm

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