Since the beginning of the crisis, euro area governments have experienced greater fiscal stress than governments of advanced economies outside the euro area with weaker fiscal fundamentals. What has been the source of this fragility? How does it relate to the role of the ECB in exerting fiscal discipline in the euro area? How can it be corrected?
Athanasios Orphanides is Former Governor of the Central Bank of Cyprus (2007-2012) and currently Professor of the Practice of Global Economics and Management at the MIT Sloan School of Management.