STUDY Is the Euro Failing? Structural Problems and Policy Failures Bringing Europe to the Brink KLAUS BUSCH April 2012 „ „ The shortcomings of the Maastricht Treaty and the effects of the global economic crisis on public debt must be considered the decisive causes of the euro-crisis. „ „ The crisis has been exacerbated by multiple policy failures. This is based on the pri­macy afforded to the philosophy of economic austerity, which is responsible for the adjustment programmes in Greece and Portugal, but also for the toughening up of the Stability and Growth Pact and the»fiscal union« agreed in December 2011. Misguided»shock therapy« has imposed a recession on Europe at the beginning of 2012, which will only deepen the debt crisis. „ „ Another cardinal policy error was the debt haircut for Greece agreed in July 2011. Since then the financial markets have run wild. The ensuing summits, due to the ECB’s reluctance to intervene massively(the»bazooka«) and the bungling of the EFSF and the ESM, contributed nothing to solving the crisis, whether short- or me­dium-term. „ „ Analysis shows that only measures that go beyond Maastricht – such as a new growth strategy, eurobonds, abolishing the market states approach, reforming the financial markets and supranational European economic government – can provide a lasting solution to the crisis.