There is a close parallel between the euro crisis and the international banking crisis of 1982. Then the IMF and the international banking authorities saved the international banking system by lending just enough money to the heavily indebted countries to enable them to avoid default but at the cost of pushing them into a lasting depression. Latin America suffered a lost decade. Today Germany is playing the same role as the IMF did then. The setting differs, but the effect is the same. The creditors are in effect shifting the whole burden of adjustment on to the debtor countries and avoiding their own responsibility for the imbalances. Interestingly, the terms “center” and “periphery” have crept into usage almost unnoticed, although in political terms it is obviously inappropriate to describe Italy and Spain as the periphery of the European Union. In effect, however, the euro had turned their government bonds into bonds of third world countries that carry the risk of default. This fact was ignored by the authorities and it is still not properly recognised. In retrospect, that was the root cause of the euro crisis. Article 
Hello Susan,
thanks for the very interesting article.
Euro bonds make only sense when there is an independent watch-dog or referee.
In the EU the Commission has been given the role of supervising and enforcing the implementation of EU law. The Commission has to see to it that the provisions of the treaties and the decisions of the institutions are properly implemented and endeavours to maintain a climate of mutual confidence. If it performs its assigned watch-dog function properly, all concerned can carry out their obligations to the full, secure in the knowledge that their opposite numbers are doing the same and that any infringement of the treaties will be duly penalised.
A Commission that functions as the “guardian of the treaties” would be an important stabilizing pillar for EU.
However the Commission contributes to the destabilization of the EU by fundamentally not fulfilling its duties like most of the member states. Europe has not a regulation but an implementation, enforcement deficit.
regards
Luise
This is so interesting. Can you explain a bit more, Luise?