Must-Read: Athanasios Orphanides: The Euro Area Crisis Five Years After the Original Sin: “Why did Europe fail to manage the euro area crisis?…

…Studying the EU/IMF program… imposed on Greece in May 2010–the original sin of the crisis–highlights both the nature of the problem and the difficulty in resolving it. The mismanagement can be traced to the flawed political structure of the euro area…. Undue influence of key euro area governments compromised the IMF’s role to the detriment of other member states and the euro area as a whole. Rather than help Greece, the May 2010 program was designed to protect specific political and financial interests in other member states. The ease with which the euro was exploited to shift losses from one member state to another and the absence of a corrective mechanism render the current framework unsustainable. In its current form, the euro poses a threat to the European project.