Why did Europe fail to manage the euro area crisis and what lessons can be drawn from this failure for Europe"s future … of the euro area that permitted governments of some member states to exploit problems in other member states that share … the common currency. Undue influence of key euro area governments compromised the IMF"s role to the detriment of other …

This paper explores the dominant role of politics in decisions made by euro area governments during the crisis …. Decisions that appear to have been driven by local political considerations to the detriment of the euro area as a whole are … costs across the euro area. The example of Cyprus is discussed, where political decisions resulted in a transfer of about …