Finally, I will discuss changes that are being made to the euro-area’s institutional set-up and their implications for the single currency’s future. Origins of the crisis Five years ago the thought of a euro-area crisis seemed counter-intuitive. After all, as David Marsh points-out in his book on the euro, European monetary union was undertaken to make the kind of crisis that occurred impossible.
However, when deciding on what architecture to give to the monetary union, policymakers settled on a “bare-bones” approach. The approach rested on a single independent, price-stability-oriented central bank – the ECB – and fiscal discipline by the member countries, fostered by the rules of the Stability and Growth Pact and enforced by the markets.