The Portuguese malaise: Structural causes of the crisis and lessons for the eurozone

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Series Details Vol.31 No.2, June 2011, p47-52
Publication Date June 2011
ISSN 0265-0665
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The analysis of the structural causes of the Portuguese crisis points to a mix of internal and external factors that reinforced each other. Among the external factors were the perverse incentives posed by the current institutional setting in the EU and the single currency. These have wider implications for the eurozone in that the long-term sustainability of the eurozone will require more effective operation of internal adjustment mechanisms. Additionally, the implementation of monetary competition in the eurozone is suggested as an alternative to the current path towards greater centralisation.

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