The current crisis has produced dramatic effects on European countries' economic and social fabric. Its economic aspects, although they may be important, are only a symptom of a wider political problem that concerns Western democracies' ability to address issues that have been building up for over two decades. Democratically elected authorities find it difficult to make unpopular decisions that could compromise their re-election. And so "emergency" becomes the motor of political action and its justification vis--vis voters; and remedies that are enacted belatedly and only under market pressure become even more painful and unpopular. This is the backdrop against which the events narrated in this book occur. Ranging from Athens to Berlin, from Rome to Brussels, the author discusses debt, the private-versus-public sector debate, the banking industry, inadequate oversight, paralysis in European decision-making, and the intrinsic limits to austerity policies that are not accompanied by structural reforms.

Lorenzo Bini Smaghi, a former member (2005-11) of the European Central Bank Executive Board, is a visiting scholar at the International Affairs Institute in Rome and Harvard University.