After the subprime crisis, many economic policy mistakes were made in the euro zone that will not be repeated this time around

Many economic policy mistakes were made in the euro zone in the aftermath of the subprime crisis: Fiscal deficits were reduced quite quickly from 2011, which contributed to the contraction in demand; Quantitative easing was only implemented in 2015, which gave rise to a sharp rise in interest rates in peripheral countries and triggered a public and private debt crisis in these countries; The public and private debt crisis triggered a crisis of mistrust in peripheral countries, leading to a halt to capital mobility between euro-zone countries and therefore a balance of payments crisis in peripheral countries with external deficits; The illusion that Greece could become fiscally solvent again was maintained for years, and extreme rigour was imposed on it before a restructuring of Greek debt had to be accepted. These serious economic policy errors in the aftermath of the subprime crisis will fortunately not be repeated now after the COVID crisis.