Columbia International Affairs Online: Policy Briefs

CIAO DATE: 06/2011

External versus Domestic Debt in the Euro Crisis

Daniel Gros

May 2011

Centre for European Policy Studies

Abstract

As EU leaders muddle through the eurozone crisis, the debate about its root causes continues. CEPS Director Daniel Gros argues in this Policy Brief that the debate is important if we are to understand how to prevent future crises. In his view, external debt is the key to the turmoil in European economies and that the focus on total public debt is therefore misleading.