The potential impact that a failure of the European monetary union could have is complex to predict. This impact has likely been made worse over the past crisis due to additional uncertainty caused by policy mistakes. Despite significant policy actions, European sovereign debt markets continued to sour until the ECB took definitive action in summer of 2012. The fact that the original Greek deal was not large enough, that growth in aided countries and the Eurozone was continually overestimated, and that the effect of austerity was repeatedly underestimated undermined world confidence in the EU’s ability to come to an effective policy solution to avert an eventual Greek default or the collapse of the monetary union. ...
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