Financial crisis based on the U.S. Sub-prime mortgage market problems affects the euro zone members from different aspects. The crisis affects Austria and Ireland through problems in the financial system; Portugal and Spain through the housing sector problems and external deficit; and Italy and Greece through the twin crises problem the external deficit and the budget deficit. Asymmetry problem showing different effects of the crisis in each country has also brought the policy mismatch for The Euro Zone. Especially, fiscal discipline issue and the lack of financial integration (fiscal federalism) in the Euro-zone are the main axis of the discussion made on impacts and solutions of the crisis. The double-headed structure
between the currency-exchange rate and fiscal policies shaped by the Maastricht Treaty exhibits a situation that threatens the continuity of the Euro Zone thereby deepening effects of the crisis. Recommendations for solution developed in the literature against this threat can be grouped under the titles of "Political unity, the European Monetary Fund and the Euro Bond". The aims of this study are to evaluate the Euro-zone crisis within the frame above and debate the ways of solution offered against the crisis.
Debt Crisis of Euro Zone, PIIGS Countries, Financial Crises. JEL Classification: E52, E58, F15, F33.