In the heat of the crisis back in 2011, I edited the book “Institutions in Crisis.” The emphasis was on the policy failings at the root of the European crisis, and how they were exacerbating the situation rather than bettering it.
Three years on much of the analysis still stands. In fact, a number of chapters have proven quiet prescient, for example:
1. Anthony Evans´ discussion about how not all of Ireland´s economic rise was fake - much was real, and caused by a favorable tax and business policy. As it meanders its way to a slow recovery much of this real economic growth is coming back, while the malinvestments caused by low interest rates still languish.
2. My own chapter focused on Europe´s black markets as a silver lining amidst the unemployment crisis. As periphery European countries today see their unemployment rates normalize again, the role of the black market as a source of jobs cannot be overstated.
3. Antonio Zanella pointed to accounting rules as favoring some investments (mostly unstable ones) over more sustainable practices. These problems persist to this day and endanger the recovery.
4. In his now well-known analysis, Philipp Bagus pointed out the problems with the Eurosystem and the tragedies that can befall disparate countries all sharing a common currency.
5. Fernando Ulrich and Malte Kähler pointed to the fiscal ruin being fostered by discretionary and needless government policies.
6. Brian Ó Caithnia elaborated how the European Union´s single biggest fiscal policy - the Common Agriculture Policy - was a source of tension and reason why growth would remain sluggish. Today the policy remains fundamentally unreformed and is a source of political consternation and wasted euros.
Edward Elgar has just made the book available online at an affordable price.
As an added bonus, the preface by Jesús Huerta de Soto is available for free here.
