With no political union in Europe, the Euro crisis may be a ‘never ending game’ for deep-rooted economic reasons

The long term causes of the Euro crisis were a Euro monetary policy that in combination with wage policies fuelled rapid growth and wage inflation in smaller economies like Greece, Portugal, Spain and Ireland, while simultaneously depressing growth in the stronger economies like Germany. Bob Hancké argues that fiscal federalism, i.e transfer arrangements between the faster and slower growing regions, may have softened the crisis. But for now it seems, there may be few ways out.