The design of the current European Union's system is overwhelming with plenty of flaws in need of rectification. The author of this article has identified six.
- Repeated attempts to address solvency problems through liquidity policies. With the high interest rates that countries have to pay, providing a no-default guarantee to bank bondholders still makes the countries insolvent.
- Lack of political coordination. This is especially the case when everyone in the system is ultimately just trying to optimize their own corner of the system.
- Breakdown of communication. Details are usually lacking whenever any of EU's member countries announce a new policy.
- Tendency of governments to blame investors. The EU always likes to blame investors for speculating in the market causing busts in the market when the truth is that confidence in eurozone's crisis management has been lost.
- Tendency of EU members to blame one another. This is especially so when the crisis develops and the Germans had a go at the Greeks. Now, the Spanish and Irish blame the Germans.
- Tendency to appeal to the ECB when all else fails. However, the ECB is not able to solve the ongoing crisis alone.
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