Europe’s Test—What Greece’s Debt Crisis Means for the World

Originally published by the Carnegie Endowment for International Peace

Greece’s debt crisis and loss of competitiveness are raising concerns far beyond its borders, including the viability of the single currency and the recovery of the euro zone. European leaders have promised to support Greece and safeguard the euro, but resisted an immediate bailout.

In a new video Q&A, Uri Dadush analyzes the dangers this new crisis poses for other vulnerable countries and recommends actions for policy makers in Greece, Europe, and the G20 to deal with the fallout. Dadush says that while this is the biggest test the euro area has faced, Greece’s imbalances are neither unprecedented nor—with help—unmanageable. “Given the business, banking, and political interests in a positive outcome, Greece will either rescue itself, or be rescued.”