The Neoliberal Root Cause of European Debt Crisis
Author：Chien-Yi Lu, Associate Research Fellow
In recent years, the European debt crisis seems to have come to a temporary halt. However, is the cocktail therapy of austerity measures and bailouts a passive attempt to keep the struggling European Monetary Union alive, or is it an aggressive attempt to cure the symptoms of the EMU for good? The answer depends on identifying the real root cause of the European debt crisis. In hindsight, this paper explores how the rise of neoliberalism influenced the decisions and feedbacks offered by political elites and intellectuals, and pinpoints the underlying problems of the Euro and the reasons for making what we can now interpret as the wrong decisions at the time of the hype of neoliberal ideas. First, this paper will discuss the possible causes of the European debt crisis and the problems it left behind. Furthermore, this paper will break down the “causes” of the European debt crisis or the inevitable “symptoms” of EU integration under neoliberalism. Finally, this paper will examine in depth the relevancies between the definition of neoliberalism and existing integration theories.