A Distinguished Speakers Seminar (DSS) held by the Asian Development Bank Institute (ADBI) in Tokyo in November came to the powerful conclusion that the European mess was getting messier.
As stated by Wyplosz ( 2011 ), since late 2009 the European debt crisis has not shown any sign of recovery.
For several reasons, apparently, the policy responses have been wrong. Wyplosz argues that the mother of all mistakes may lie in the policy options to provide ¤110 billion to save Greece through its tough austerity program.
There were two major flaws in this policy. First, it violates the no-bailout clause in the European Central Bank (ECB) system; and second, austerity in the midst of recession cannot act as a remedy.
These factors eventually led to a liquidity crisis that has overwhelmed the European banking system (Collignon, 2011).