Welcome to the Institute of European Studies project to promote dialogue about EU-Canada relations. Here you will find traditional research in the form of brief policy papers and analysis. The site is also an interface for the public to express their opinions on EU-Canada relations in general and economic and environmental cooperation in particular. The site will hopefully act as a gateway to the wider news and opinion forums that are available.
Prepare ourselves to think about the heretofore unthinkable: The break up of the Euro Zone. What started as a much-higher-than-expected debt-to-GDP-ratio in Greece, made its way to Ireland may soon arrive in Portugal and Spain. So far, these two southern core economies of the Euro Zone have avoided the regulations of bailout packages, which now seem to have merely been delayed. Already, the spread of Spanish and Portuguese government bonds compared to German Bunds has increased significantly. Yet, even Germany recently had to pay a small premium on its government bonds, as investors feared that the exposure of German financial institutions in the debt-troubled economies of the Zone might endanger economic stability in Germany—turning the crisis deadly for the Euro Zone. It is now well established that the common currency cannot survive with such huge differences in debt costs (table). Just how to overcome the crisis, however, is hotly contested.
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