FALL / WINTER 2010 VOLUME XVII, ISSUE I 199 The year 2010 has been a difficult one for the European Union. In response to the mounting pressures on Greece from the international financial markets, the EU in early May extended a €110 billion loan to save the country from sovereign default. en, just six days later, a massive €750 billion fund was instituted to stop the contagion of Greece’s sovereign debt crisis from infecting other weaker Southern European economies. It was intended to signal to the markets that the EU would cover its member-states’ debts. In conjunction with this response, the European Central Bank (ECB) started buying euro-denominated government debt to help stabilize the markets. Subsequently, member-state governments agreed to allow the European statistics agency, Eurostat, to review member-states’ accounts and the Commission to vet member-states’ annual budgets. Moreover, all over Europe, and not just in the South, EU member-states began a coordinated move to slash their budgets in order to bring down deficits and pay down public debt. None of these initiatives was enough to satisfy the markets for long, however. By the end of November, Ireland was forced to turn to the new EU fund for a €85 billion loan, and the markets had already begun pounding Portugal as speculation mounted with regard to Spain’s ability to resist. All of these actions went far beyond what EU member-states had ever done in the past, as well as beyond (and possibly against) what was written in the EU’s treaties, including the recent Lisbon Treaty, now known as the Treaty on the Functioning of the EU (TFEU). In so doing, the EU took unprecedented steps toward deeper economic and political union. ese actions raise a host of questions regarding European economic consolidation, monetary policy, and political will. is article Vivien A. Schmidt is the Jean Monnet Chair of European Integration, Director of the Center for Inter- national Relations, and Professor of International Relations and Political Science at Boston University. Her publications include Democracy in Europe and e Futures of European Capitalism. Brown Journal of World Affairs, Copyright © 2010 e European Union’s Eurozone Crisis and What (not) to Do About It VIVIEN A. SCHMIDT