crisis which began in Greece, grew into a crisis of the entire eurozone. You may be able to find some sort of temporary solution. But even in that case, the crisis has left an indelible mark on the macroeconomic policy in the euro area.

crisis in Greece, in particular, has demonstrated that financial markets dictate, and will dictate the Governments of the euro zone, the speed with which they must reduce the budget deficit and debt. In other words, the exit strategy of anti-crisis measures will determine the budget is not the government, and financial markets.

Proponents of the theory of efficient markets triumph. Now that markets become accustomed to discipline profligate governments, pushing them to a more traditional [fiscal] policy. Government, which will be resisted, and will not fulfill the commandment of the market, will be punished by a higher risk premium on their bonds. In the end, the market will force them to return to more moderate and sustainable fiscal policies.

again becoming a popular view that financial markets - a reliable means of maintaining discipline among agents and institutions. It's amazing. Is the recent past should not have lead us to believe that as a disciplining mechanism of financial markets suffered a complete fiasco?

Before the crisis, second-rate mortgage financial markets systematically underestimated the risks. Because of that risk premiums were too low, that was a false incentive for millions of investors, prompting them to take on too much risk. When the crisis came, risk premiums everywhere rose.

But we are confident in the adequacy of current risk premiums defined markets now? Earlier, markets for years underestimated the risks, if they can now, after the crisis, they are systematically overestimated? Answer: of course, can.

all even worse. Avoiding today's markets risk gosobyazatelstv triggers a chain reaction, which resulted in the government bond risk rises even more. Let me dwell on this more.

First, it is important to remember that the main reason for a sharp increase in government debt in the eurozone and elsewhere - is preceded by a explosive growth of private debt (including households, and especially financial institutions).

When the crisis struck, the private sector had to adjust balances: save more and reduce the debt burden. However, improving the balance of the private sector was only possible thanks to the state. Just because governments have become less reserved and gained new debts, was a condition that allowed the private sector to fix their balance sheets.

forcing the government eurozone (and other countries) to abandon the strategy of accumulation of budget deficits and debt, financial markets are sawing off the branch they are sitting. Forcing early folding anti-crisis programs, financial markets are forcing the private sector to reduce the debt faster, more saving, and selling assets. This is akin to self-destruction and can lead to another recession. And during a recession, as always, will increase the budget deficit.

It's a vicious circle. Financial markets force governments to turn prematurely anti-crisis measures, which increases the threat of growing budget deficits, that is precisely the risks that financial market participants want to hedge.

There samoraskruchivayuschiysya second mechanism, which would have a negative impact on fiscal policy in the euro area. Starting to drop in, say, the Spanish state bonds, investors pushed the interest rate of government securities up, forcing the Spanish government to reduce the budget deficit.

But cutting spending is likely to lead to a slowdown in economic activity in Spain, but it hit its trading partners. The volume of their exports to Spain will fall, followed by the fall and release. Because of this, in countries that are actively trading with Spain, will increase the budget deficit. Thus, selling the Spanish state bonds, investors increase the risks for other States bonda eurozone. Market participants are beginning to sell these bonds.

The problem is that investors get rid of the state bonds of one country do not take into account how these sales will affect the risks of bonda other countries. The risk of contagion in the euro area is high, since the countries in the region are actively traded with each other. Trying to avoid the risk of [a country], investors create additional risks for the other eurozone countries.

In addition, if one of the eurozone countries will be forced to turn anti-crisis measures in advance, the same will be done and other States unit, even if they do not need it. The probability of a new recession in the euro area will increase. There is only one way to solve this problem. Eurozone government should better coordinate their fiscal policies. Unfortunately, hopes that soon it will be so, there is little. As a result, financial markets will continue to determine fiscal policy in the euro area, although for this they are ill-suited.

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