In this paper Dr Colin Rogers considers the current economic crisis in Greece and argues that the governance structure of the Euro is exacerbating the crisis with the potential to turn what is a liquidity crisis (following the flight of private capital) into a solvency crisis. The inability to use state-backed money requires the European Central Bank to fulfil its role as a central bank and accept responsibility for the solvency of member countries. Dr Rogers argues that current policy responses are the polar opposite of what is required.

The paper was prepared as part of the Centre’s corporate membership program.