Sovereign Debt Crisis and the Future of the Euro Zone seminar
25/05/2011
The Perez-Llorca / IE Chair for Commercial Law seminar on "Sovereign Debt Crisis and the Future of the Euro Zone" took place on May 25th. The speaker was Luis de Guindos, Director of PwC's Financial Sector at IE Business School, and the discussant was Francisco León, Of Counsel at PEREZ-LLORCA and Professor of Commercial Law at the University of Huelva.
Luis de Guindos analyzed the circumstances that triggered the EU debt crisis, the measures being taken and reasonable expectations for economic development. At the birth of the euro, which he experienced first-hand, a series of cohesive devices were set to ensure the implementation of the single currency. However, an economic crisis like the present one was not foreseen. The sovereign debt crisis of some European states such as Greece, Ireland and Portugal is largely due to the lack of compliance with the conditions under which these countries joined the euro. The situation of each of these countries is different and it is the result of diverse causes. However, the implications of this intervention go beyond these countries, affecting, in fact, the entire European Union and demanding a comprehensive solution.
The sovereign debt crisis threatens Spain greatly. De Guindos was in favor of adopting urgent measures. From his point of view, the Spanish financial system needs a complete reorganization, completing the conversion of savings banks into limited liability banks, making the labor market more flexible, drastically reducing regional and local spending, and enhancing the competitiveness of Spanish companies in the context of globalization. Once the adjustment of European economies has been completed, if the necessary measures to correct structural imbalances are adopted and the coordination through the European institutions on fiscal and budgetary policies is strengthened, the euro will emerge stronger.
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