Since the onset of the global financial turmoil in 2007 and 2008, we have seen a gradual aggravation of the financial crisis mainly due to the strong links between banking systems, economies and governments’ fiscal position. This deteriorating economic environment has resulted in a widening of economic imbalances, social unrest and political instability.
The Economic and Monetary Union (EMU) has been severely hit by the crisis and still faces difficulty carrying on and finding its way 'out of the woods'. Without doubt, one of the major reasons for the EMU’s vulnerability is that it is an incomplete project, as the economic dimension of the union has remained mainly a national matter. As a result, the eurozone has not been able to cope with the severe asymmetric shocks while such structural imbalances remained. A clear image of these imbalances is depicted by the difference in the current accounts of countries in the European north and south.
