Resumo

PERROTINI HERNANDEZ, Ignacio. Debt, deflation and euro crisis. Argumentos (Méx.) [online]. 2012, vol.25, n.70, pp.15-38. ISSN 0187-5795.

Europe's on-going crisis, mistakenly dubbed as "a sovereign-debt crisis", boils down to a crisis of the eurozone's institutional foundations with regards monetary and fiscal policy, which, in turn, paved the way for the anchor country (Germany) and other surplus economies (Austria, Belgium, France and Netherlands) to follow wage-deflationary and beggar thy neighbour policies that, eventually, trigger financial fragility and debt crises within a suboptimal and asymmetric monetary union. Therefore, the conventional policies (deflation and fiscal austerity) implemented to tackle the crisis, akin to the old Treasury View and Say's Law, will in all probability worsen the situation in peripheral Europe. It is argued that Europe should, instead, bridge its current institutional asymmetries and adopt expansionary policies with a view to improve economic activity and employment.

Palavras-chave : sovereign debt; deflation; wages; monetary systems; monetary policy; fiscal policy.