German neomercantilism and the European sovereign debt crisis

The causes of the recent sovereign debt crisis within the eurozone are examined from the perspective of the peculiar institutional framework inherited from the Maastricht Treaty of 1992. The article argues that German neomercantilism is at the very core of Europe's descent into a seemingly irreversible phase of stagnation. In the absence of fiscal federalism, the sovereign debt crisis will only worsen, pushing the eurozone into a possible phase of debt-deflation.