Introduction

Abstract

The issue of debt has moved to the center of economic, political and social concern throughout the OECD countries. Finding a solution to the debt problem has become a major challenge for the richest and most highly developed economies in the world. The trends that have led to the current debt crisis started well before the outbreak of the so-called subprime crisis in 2008. The worldwide monetary crisis amplified these trends both in large and small economies, leading to the outbreak of a “sovereign-debt crisis” in early 2010. While Greece has become the symbol or the catalyst of the “debt crisis,” it is far from an isolated case, and it would be an error to say that Greece or earlier Iceland or Ireland have been exceptions in an otherwise healthy financial and fiscal environment, and the primary challenge was to keep these countries from “contaminating” the sound fiscal and economic position of their European and world-wide partners. The positive feature of the period since the outbreak of the debt crisis has been the determination of the Members of the European Union and in particular of the Euro Zone not to let the current crisis destroy the extraordinary achievements of 60 years of political and economic integration in Europe. Whatever the merits or shortcomings of specific measures proposed or adopted such as the “fiscal pact” or the “banking union” there is no question that a breakddown of solidarity between “strong” and “weak” countries in the European Union would be a severe blow to the stability of Europe but also of the Western Community as a whole and of international order in general.