The Eurozone in 2011

The year 2011 saw the eurozone sovereign debt crisis go from bad to considerably worse. Although budget deficits fell in almost all Member States, continued concerns over debt sustainability and the fragility of eurozone banks contributed to a sharp slowdown in economic growth, which, in turn, cast doubt on the credibility of further fiscal consolidation. This article examines key developments in its review of the eurozone for 2011. Section I summarizes the economic outlook for the eurozone in 2011. Section II explores key developments in eurozone monetary policy. Section III examines the ESRB's first full year. Section III discusses compliance with the Stability and Growth Pact in 2011 and the launch of the new European Semester. Section IV takes stock of the key reforms to eurozone governance in 2011. Section V examines the eurozone's international role in 2011, focusing on its interaction with the IMF and the Group of Twenty (G20).