European Economy. Quarterly report on the euro area 2012.

Abstract

In the past weeks and months the stability of the Economic and Monetary Union has been increasingly called into question, at least in certain segments of financial market commentary. At this criticalpointin time it cannot be stressed enough that what truly underlies doubts concerning the EMU set-up is a crisis of confidence -confidence in the health of the banking system, in the sustainability of public finances, in Member States' ability to rebalance and grow, but also confidence in the political process that governs the crisis response in the euro area and beyond