The Lessones of the Great Recession for Central Europe Presented Through the Two Centers of the World

Abstract

The lessons learned from the crisis management of the 2008 Great Recession are due to significant structural differences between the two centers of the world, the United States and the eurozone. This has been the worst and most widespread global economic downturn since the Great Depression. The crisis is over, but it seems that the crisis has long-lasting consequences. In the case of the United States, a monetary, fiscal and political union is realized, which with a single economic policy, operates as a coherent unit, uniting the three areas. GDP is rising, unemployment is at the lowest level since 1969 and government debt is the highest it has ever been which can cause problems in the long run. In the case of the eurozone, we can talk about a monetary union. The crisis has highlighted the structural flaws of the eurozone, because without a unified fiscal policy no effective economic policy can be achieved. The symptoms of the euro area crisis weren't the consequences of the global economic crisis; rather the stalling of the integration process, the lack of real convergence, and the weaknesses of monetary and fiscal policy were the problems that have been brought to the fore and exacerbated by the crisis. I consider the crisis management of the United States to be more successful, in which the single economic policy has played an important role – as long as the eurozone doesn’t deepen integration, it will not be able to address vulnerabilities between its countries. For Central Europe to be competitive, it has to have the right economic policies and an independent monetary policy. The postcrisis recovery has taken place, but in order to avoid further crises and to have a faster convergence towards the eurozone, we need targeted steps which could create the opportunities.