AEI's John Makin examines the consequences of German deflationary policies and Greece's probable exit from the eurozone in the latest Economic Outlook.

When the G8 major economies convened at Camp David last weekend, the continuing crisis of the euro, common currency of 17 European Union (EU) members, dominated the economic discussions. The agonies of Greece, badly divided in recent parliamentary elections, and forced to vote again on 17 June, were at the forefront.

With each passing day, Greece's economic and political malaise deepens despite one massive International Monetary Fund-European Union bailout package after another to keep that country afloat.

The collapse of the Papandreou government may undo European efforts to restructure debt and hold the union together.

Over the past few months, there has been a marked intensification of the Eurozone debt crisis that could have major implications for the United States economy in 2012.

There will be a further and significant intensification of the Euro-zone debt crisis in the months immediately ahead, and efforts currently underway by European policymakers will fall short.

This statement is available here as an Adobe PDF.

The Eurozone Crisis: A Roadmap for Urgent and Decisive ActionWhile European leaders have been meeting in Brussels to address the crisis in the eurozone,...

As we enter the fall of 2011, three years after the Lehman Brothers crisis, Europe and the United States are teetering on the brink of another, potentially more serious, systemic crisis.