THE CRISIS OF THE EURO AND NEW EUROPEAN GOVERNANCE: FISCAL UNION AS SOLUTION?

This paper presents a set of crucial events, arguably deemed to be the cause of the recent economic crisis, and tries to come up with a connection between the global and euro crisis. It begins with the presumption that the existing crisis in the euro zone can only be overcome with appropriate institutions and persistent measures of economic policy. Through a detailed analysis of existing and announced policy tools, this paper tries to identify ways of further development, by discussing the necessity of creating a fiscal union in the euro area.