Euro zone: Youthful mistakes

Since its creation in 1999, the euro zone has committed several significant economic policy mistakes, which would not be committed today. We call them the euro zone’s “youthful mistakes”. They include: Letting the decline in interest rates give rise to a sharp increase in debt combined with a real estate bubble; Returning to a more restrictive fiscal policy so soon after the 2008-2009 subprime crisis, which sent activity tumbling again; Not implementing a monetary policy response to a situation that combined a public debt crisis, an external debt crisis and expectations of a break-up of the euro .