"The eurozone is now repeating what had often happened in the global financial system. There is a close parallel between the euro crisis and the international banking crisis that erupted in 1982.
Then the international financial authorities did whatever was necessary to protect the banking system: they inflicted hardship on the periphery in order to protect the center.
Now Germany and the other creditor countries are unknowingly playing the same role.
The details differ but the idea is the same: the creditors are in effect shifting the burden of adjustment on to the debtor countries and avoiding their own responsibility for the imbalances.
Interestingly, the terms “center” and “periphery” have crept into usage almost unnoticed. Just as in the 1980’s all the blame and burden is falling on the “periphery” and the responsibility of the “center” has never been properly acknowledged.
Yet in the euro crisis the responsibility of the center is even greater than it was in 1982.
The “center” is responsible for designing a flawed system, enacting flawed treaties, pursuing flawed policies and always doing too little too late.
In the 1980’s Latin America suffered a lost decade; a similar fate now awaits Europe.
That is the responsibility that Germany and the other creditor countries need to acknowledge. But there is no sign of this happening."
Remarks at Festival Of Economics, Trento, Italy