SUKRITI JAIN

Will EU survive the second decade of the new millennium?

CONTENTS
1. ORIGIN........................................................................................................................................... 6 1.1 1.2 2. 3. 4. Perceived benefits ................................................................................................................... 7 Rules governing union (Stability and Growth Pact and Maastricht Treaty) ........................... 7

Faultlines ......................................................................................................................................... 7 current SCENARIO ........................................................................................................................ 8 WHY SAVE EURO? .................................................................................................................... 10 4.1 ALTERNATIVES................................................................................................................. 11 Split ............................................................................................................................... 11 Institutionalised austerity and ECB bailing out ............................................................ 13 ECB lends money to IMF and latter disburses loans with stiff conditionality’s ........... 13 Creation ofEuropean treasury/ EmpoweringEFSF ........................................................ 13 United States of Europe and issuance of Euro bonds: .................................................. 14

4.1.1 4.1.2 4.1.3 4.1.4 4.1.5 5.

WAY FORWARD ........................................................................................................................ 15

TABLE OF FIGURES

Figure 1: Prospects of the financial sector and sovereign spreads