Search

In this article the author discusses the policy paper entitled "State Aid and the Credit Crunch" that was published in Europe in April 2008. He says that it aimed at affecting the policy stance of Directorate General (DG) of Competition at the European Commission (EU), but it did not respond to the paper. He also stresses that the global banking crisis have implications for economic development projects and the supply of finance for small businesses across Europe is disappearing.

In the past decades many cities have experienced growing pressure to produce and stage cultural events of different sorts to promote themselves and improve economic development. Culture-led development often relies on significant public investment and major private-sector sponsoring. In the context of strained public finances and profound economic crisis in European peripheral countries, local community low-budget events that manage to create significant fluxes of visitors and visibility assume a particular relevance. This paper looks at the four editions (2011–2014) of Noc-Noc, an arts festival organized by a local association in the city of Guimarães, Portugal, which is based on creating transient spaces of culture by transforming numerous homes, commercial outlets and other buildings into ephemeral convivial and playful ‘public’ environments. By interviewing a sample of people who have hosted (sometimes doubling as artists) these transitory art performances and exhibitions, artists and the events’ organizers and by experiencing the four editions of the event and engaging in multiple informal conversations with the public, this paper attempts to discuss how urban citizens may disrupt the cleavages between public and private space permitting various transgressions, and unsettling the hegemonic condition of the city council as the patron of the large majority of events. [ABSTRACT FROM AUTHOR]

This paper examines the observed impact of past economic downturns on human development indicators in 29 countries of the region. We estimate empirical elasticities of key human development indicators covering demographics, crime, epidemiology, unemployment, and poverty with respect to changes in per-capita purchase power parity (PPP) gross domestic product. Based on published gross domestic product growth projections from the IMF, we then project the likely impact on the human development indicators in coming years for the countries in the region. The results suggest that the adverse impact of past downturn in income on poverty, public health, mortality, and suicide and homicide rates is likely to be considerable, long-lasting, and to affect the poorest disproportionately. Based on our results, we argue that policy-makers will need better and more timely data to provide the evidence base for policies; and that those policies need to take into account the looming substantial backslide in human development indicators stemming from the global economic crisis. [ABSTRACT FROM AUTHOR]

Purpose - The purpose of this paper by the European Shadow Financial Regulatory Committee (ESFRC) is to provide an account of the financial crisis in Europe during the period 2010-2013 and an analysis of how the relevant authorities reacted to the crisis. Design/methodology/approach - These actions included measures taken by central banks, governments or fiscal authorities, and by regulatory or supervisory bodies. In a previous study covering the regulatory developments during the financial crisis up until 2009, issues such as the implementation of Basel III rules in Europe and the (mostly ad hoc and unilateral) resolution mechanisms set in most European countries to fight the crisis were covered. This study focuses on developments since 2010 with a focus on the concerns and actions that emerged with the sovereign debt crisis in the euro area. In particular, the transition from the European Financial Stability Facility to the European Stability Mechanism is assessed. The focus after 2012 has progressively turned to the challenges of the European banking union. Findings - These issues are jointly covered, along with some updates on the views of the ESFRC on recent advances in other areas, such as solvency regulation. All in all, the authors find that the weaknesses of the global financial system remain to be addressed, and they believe that the banking union is one of the main tools and opportunities for an improved and efficient crisis management in Europe. Originality/value - The paper aims at contributing to the study of financial regulation after the banking crisis. The experience of the euro zone in this context is assessed in this article from a wide range of perspectives. [ABSTRACT FROM AUTHOR]

In this paper, we analyze the causality among inflation, output growth, and their uncertainties in all European countries with emerging economies. For these countries, high uncertainty regarding economic growth during the current economic and financial crisis that started in 2008 caused their governments to increase their efforts to sustain growth, and to maintain a low level of inflation. Of the twelve possible hypotheses regarding the causal relationships among inflation, output growth, and their uncertainties, we consider five relationships for which we find strong theoretical arguments and empirical evidence in the literature. The empirical evidence strongly supports the Friedman-Ball hypothesis that inflation Granger-causes inflation uncertainty. For the other four tested hypotheses, fewer significant causal relationships are obtained. [ABSTRACT FROM AUTHOR]

Within the current European economic landscape, plagued by financial, economic and national debt crises, a vivid debate has been sparked in the academic and professional environment regarding the way in which the European banking sector can contribute to the achievement of a long term sustainable economic growth. The debate is even more entailed since the financial crisis started in the banking sector and the main contagion happened through banks operating regionally and globally. Within this context, our paper aims at providing an overview of the main characteristics of the European banking sector and of the challenges that it will face in the post-crisis period. This represents a first necessary step in our opinion, for the better understanding of the way in which the European banking sector can contribute to the achievement of a long term sustainable economic growth. In order to achieve this we used a qualitative analysis combined with a series of empirical data and a series of own calculated indicators that underline some of the characteristics of the EU member states banking systems. [ABSTRACT FROM AUTHOR]

With continued economic growth and expanding mortgage markets, until recently the pattern across advanced economies was of growing homeownership sectors. The Great Financial Crisis (GFC) has however, undercut this growth resulting in the contraction of homeownership access in many countries and the revival of private renting. This paper argues that these tenure changes are not solely a consequence of the GFC, and therefore, reversible once long-term growth returns. Rather, they are the consequences of more fundamental changes especially in labour markets. The very financialisation that fuelled the growth of homeownership has also led to a hollowing out of well-paid, secure jobs-exactly those that fit best with the taking of housing loans. We examine longer-term declines in labour market security across Europe from before the GFC, identifying an underlying correlation between deteriorated labour market conditions and homeownership access for young adults. While variations exist across European countries, there is evidence of common trends. We argue that the GFC both accelerated pre-existing labour insecurity dynamics and brought an end to offsetting such dynamics through the expansion of credit access with the likelihood of a return to an era of widespread homeownership growth starkly decreased. [ABSTRACT FROM AUTHOR]

The dramatic decline in the actual output of the European economy is considered to be more than a cyclical discrepancy from the potential output. Both the level and, the growth rate of the potential output show an unfavourable development. It is an important task of economic research to identify the channels through which the financial crisis might have an impact on the level and growth rate of the potential output. The European economic policies face major challenges while trying to find those effective answers which contribute to the mitigation of the potential output losses. The impacts of the crises on the potential growth need to be reviewed in regard to potential growth factors (labour utilization, capital accumulation and total factor productivity). It is essential to reveal the transmission channels and the experiences gained during previous financial and economic crises. The paper is based on broad mid-term quantitative analyses using the production function approach. In the end alternative long-term scenarios are analyzed. [ABSTRACT FROM AUTHOR]

The fiscal cost of the financial and economic crisis in Europe is huge. The paper provides provisional estimates of this cost and looks at its implications for the sustainability of public finances, taking into account also the impact of aging populations. The historical experience suggests that economic growth is persistently lowered in the aftermath of financial crisis, making fiscal consolidation more difficult yet all the more essential. Meanwhile the timing of the exit from fiscal stimulus and subsequent fiscal consolidation must reconcile sustainability and stabilisation goals-a delicate balancing act. The paper will argue in favour of structural reform to boost the economic growth potential alongside fiscal consolidation. The fiscal coordination framework in the EU, together with the Europe 2020 strategy, is seen to underpin this approach. [ABSTRACT FROM AUTHOR]

The emerging European economies have been converging rapidly toward the more advanced European economies in recent years. However, large external imbalances in parts of the region have raised questions about sustainability and concerns about vulnerabilities. Empirical evidence in this paper up to the end of 2007 and based on a number of methodologies suggests that the convergence trend of emerging Europe is based on strong fundamentals and is expected to continue, but at a slower pace. Moreover, the convergence path may be volatile, as countries with large external imbalances adjust, with risks of a hard landing in some cases. The results also suggest that policy could do more to address the region's imbalances. [ABSTRACT FROM AUTHOR]

The tech stock crash of 2000 discredited the new economy as business model. This article introduces a journal special issue which takes up the challenge of putting new economy developments into this post-crash perspective and establishing long-run continuities, without discounting the importance of what happened. This article opens the debate by highlighting two themes in the articles that are collected together in the special issue: first, it discusses what was and is the new economy in the USA; second, it examines the relevance and resonance of the new economy in Europe. [ABSTRACT FROM AUTHOR]

The paper proposes the analysis of the main drivers of the economic growth in Central and Eastern Europe, in three emerging countries: Czech Republic, Hungary and Poland, with a development stage similar with that of Romania. Given the vulnerabilities of the Central and Eastern Europe region at the beginning and during the recent global economic and financial crisis, there is an increased interest to identify the models that can describe the principalcharacteristics of the Central and Eastern Europe macroeconomic variables: gross domestic product, investment, wages and salaries, inflation, hours worked, consumption and themonetary variable- interest rate. Moreover, another scope is to analyze the frictions that describe the evolution of the seven data series, as the stochastic dynamic of the macroeconomic model is driven by orthogonal structural shocks. [ABSTRACT FROM AUTHOR]

Contemporary geo-economic development is characterised by global transformation from the EU and Western countries, in general, towards the Asia-Pacific and East Asian concept, which will result in further evolution of the World System determined by the economies of the new industrial and post-industrial countries. The objective of this article is to investigate the role of economies of East Asian countries in global economic development. Particularly this paper analyses the situation in the textile industry, as exemplified by China, in the world market to identify prospects for its sustainable and competitive development. During the progress of this work, it was determined that the textile industry in China is currently under the influence of delayed adverse effects of the global financial and economic crisis of 2008-2010, which can further lead to systemic risk emergence in the Chinese economy, as the textile industry plays a leading role in its economic development. Analytical procedures performed in this study clearly showed the urgency of implementing technological and managerial innovations in order to increase the competitiveness of the Chinese textile industry. The government also needs to revise its measures of support to the sector. Improving competitiveness and providing sustainable growth and development of the textile industry in China allows to create a new margin of safety for the Chinese economy and secure unconditional long term leadership for the textile industry. [ABSTRACT FROM AUTHOR]

Entrepreneurship is recognized as one of the factors stimulating economic growth and increasing economic competitiveness. In addition, the Europe 2020 Strategy has focused its attention on entrepreneurship as a key factor of economic growth, social progress, and employment. In this context, our study examines the role of entrepreneurial performance for sustaining the development of countries, focusing on a sample of European countries. We attempt to reveal if increasing entrepreneurial performance would have significant influence on improving the economic position of countries and their future economic development. Starting from the OECD-Eurostat Entrepreneurship Indicators Programme we use a set of entrepreneurial performance indicators as independent variables and examine to what extent they can influence competitiveness and economic growth, seen as dependent variables of the models. We focus on a period of 10 years (2008–2017) and we apply panel-data estimation techniques. Because the period considered includes the period of the last international financial crisis, we also include in our analysis a dummy variable. Our results emphasize that the changes in entrepreneurial performance play a significant role in enhancing national competitiveness and economic growth. Our findings contribute to the expansion of literature in the field by providing evidence on the correlation of indicators that measure entrepreneurial performance with national competitiveness and economic growth. Moreover, our findings point out the need of the policy makers to adopt measures and policies that help and stimulate entrepreneurs to become more performant because they can generate positive effects to the economy as a whole. [ABSTRACT FROM AUTHOR]

The financial perspective 2014-2020 attaches a great importance to supporting SMEs as a factor in industrial competitiveness and economic growth. The importance of an enabling environment for business and entrepreneurship, particularly for SMEs is complemented by the need to improve the impact of the economic-financial crisis from Europe, since disparities of economic development and structural economic differences still persist. In this context, the implementing clusters support policies became a priority for the European industrial policy. In addition, the Europe 2020 Strategy specifically stipulates the importance of clusters for business, especially for SME. Our paper is focusing on the European framework and the efforts made by Romania for cluster promotion as a new organization of the industrial activity. [ABSTRACT FROM AUTHOR]

We analyze whether there are negative (positive) long‐term effects of austerity measures (stimulus measures) on potential output growth. Based on the approach of Blanchard and Leigh () and Fatás and Summers () and using a novel data set of narratively identified fiscal policy shocks, we estimate the impact of these shocks on potential output. We robustly find a considerable underestimation of multiplier effects and their persistence for most European countries in the early years after the financial crisis and subsequent Euro Area crisis. We conclude that fiscal consolidation was badly timed and thus not only deepened the crisis but may have caused evitable hysteresis effects. [ABSTRACT FROM AUTHOR]

Copyright of Research Papers of the Wroclaw University of Economics / Prace Naukowe Uniwersytetu Ekonomicznego we Wroclawiu is the property of Uniwersytet Ekonomiczny we Wroclawiu and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Business Consultant / Poslovni Konsultant is the property of FINconsult Ltd. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper examines the trends and composition of volatility across European banking systems from January 1988 to December 2010. While there is no evidence of a long-term trend in the average level of banking system volatility, there is a change in its composition resulting from the growing importance of International and European nonfinancial components, especially in the largest banking systems. We argue that the changing composition of banking system volatility is the effect of a long-term integration process (with a growing importance of cross-border activities) that has not been influenced by the introduction of the Euro. Our results highlight the increasing vulnerability of the European banking systems to International and European shocks and an increasing likelihood of cross-border banking crises, and the need for regulatory reforms that focus on effective cross-border crisis management and resolution so as to safeguard the systemic stability of European banking in the near future. [ABSTRACT FROM AUTHOR]

Economic growth is a key concept in developing countries and in designing growth models becoming more efficient. This paper begins by defining the concept of growth, identifying and presenting the factors that contribute to achieving it, and finally the European growth model is outlined for attaining this objective. Given the global financial crisis started in 2008, were analyzed performance of growth models used in Central and Eastern Europe, an attempt to identify causes and effects. Thus, we have outlined three growth models: robust, moderate and a model with economic contraction. [ABSTRACT FROM AUTHOR]

While the city offers the potential of dynamic agglomeration economies which can spur the achievement of economic growth and act as an engine that powers the economy, it often appears as a centre of crisis in mature 'developed' regions and countries, even before the most recent economic downturn. This paper attempts to reconcile these two seemingly paradoxical observations by bringing in a strategic choice perspective to explain how concentrated strategic decision-making in the corporate entities that dominate our cities has diminished the very diversity that Jacobs identified as being essential for cities to flourish and develop. The industrial policy implications for cities are subsequently explored in terms of building new industrial districts, developing high skill ecosystems, and fostering multinational webs of cities, all with the aim of ensuring the conditions exist in cities for creativity and development to flourish, notably a diverse and democratic economic system. [ABSTRACT FROM AUTHOR]

This paper aims to assess the economic development and development policies in the Central and Eastern European (CEE) countries in 1990-2005, from the collapse of the USSR to the enlargement of the European Union. A great number of authors have generally seen the transition as a very positive process. They have concluded that the reform policies focusing on macroeconomic and price stability have been the key to success for CEE economies. A reliable economic environment is, of course, instrumental for longer-term economic success, as exemplified by the prolonged crisis in most of the former Soviet Union. Our analysis of the economic development and competitive advantages in the region, however, leads to the conclusion that the specific approach to transition that the Central and Eastern European countries followed came at a rather high cost. Comparative neglect and weakness of a set of policies crucial for longer-term development, such as science, technology and innovation policies, has led to deterioration in the last decade rather than the strengthening of the competitive advantages of Central and Eastern European economies. Furthermore, we argue that, in most cases, CEE countries have unfortunately overlooked or misjudged a number of development challenges, and have thus implemented policies that have generated growth at the cost of rapidly increasing risks. This is how the financial fragility of several Central and Eastern European countries has recently increased drastically, and the region seems to have virtually arrived at the brink of economic collapse. Since the CEE countries joined the European Union, the CEE governments have gradually moved towards acquiring a more active role in economic development. These policies need, however, to be strengthened considerably and reinforced by macroeconomic policies that curb current excessive dependence on foreign-financed growth. [ABSTRACT FROM AUTHOR]

What explains the post-crisis slowdown in bank credit to private sector in the South-East European economies? We try to answer this question, by comparing the actual credit growth to the fundamental and equilibrium growths. The fundamental growth is defined as the growth justified by the fundamentals, the equilibrium growth-as the growth consistent with the economy being in medium-term equilibrium. Results suggest that the slowdown reflects both return of the credit activity to its fundamental value, and return of the fundamental values to their equilibrium levels, after years of excessiveness during the pre-crisis period. Rapid credit growth, as in the pre-crisis period, should not be expected in the near future. [ABSTRACT FROM AUTHOR]

In the period of nearly three decades of post-socialist transition in the countries of Southeastern Europe (SEE), there were numerous synergistic, destructive and anti-developmental hindering institutional factors that directly caused the creation of social and economic insecurity. Many developmental problems, as well as social, economic and institutional deformations, have generated a lasting and deep crisis. This paper analyzes the basic deformations of public sector management, which has emerged as a driving force for all development problems in the SEE countries. It starts with two assumptions: first, weak and slow institutional changes were deliberately programmed by the nomenclature of government, in order to eliminate institutional competition and affirmation of the quasi-institutional monism of neoliberal type, which have enabled the substitutive development of the so-called alternative institutions; and second, highly interest-oriented motives of the government nomenclature have been the main cause of ignoring rational recommendations by representatives of non-institutional economic theories. [ABSTRACT FROM AUTHOR]

Copyright of Revue d'Economie Politique is the property of Editions Dalloz Sirrey and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The article aims to analyse the evolution of budgetary expenditures and their relationship with economic growth, especially in the EU countries and three non-EU countries - Switzerland, Norway and Iceland during 1991 - 2012. To test the link between government spending and economic growth the research used the United Nation Classification of the Functions of Government and three econometrical regression methods – ordinary least square, least squares dummy variable and the generalized method of moments. Statistical results for the 10 categories of expenditure have shown that economic affairs, environmental protection, recreation, culture and religion and social protection have a significant impact on economic growth. Also the recent economic crisis and the EU accession influenced the variation of GDP/capita. [ABSTRACT FROM AUTHOR]

Financial regional arrangements vary across countries and change over time. Until recently, most economists and political scientists took the European model of monetary integration as the yardstick to which all other regional financial arrangements had to measure up in this article. It is argued that the Euro crisis provides an opportunity for scholars to adopt a different perspective that does not interpret the variety of financial arrangements merely as economic deficiencies caused by the incapacity or unwillingness of regions to follow the European model. Instead, the comparative study of monetary and financial regionalism has to account for the different factors that shape variations. These go from different levels of economic development, over regional political and economic preferences to historical processes which shape the institutional context and the constellation of interests and social forces. Such an approach, which integrates economic and political science approaches, de-centres the Euro model and opens up a new understanding of the global diversity of regional monetary and financial cooperation, and their potential to cope with financial crises. [ABSTRACT FROM PUBLISHER]

Copyright of Trakya University, Economics & Administrative Sciences Faculty E-Journal / Trakya Üniversitesi İktisadi ve İdari Bilimler Fakültesi E-dergi is the property of T.C. Trakya Universitesi and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The importance of assessing financial stability in emerging Europe has increased rapidly since the recent financial crisis. This article elaborates on economic development and financial stability issues and challenges in Central, Eastern and South-eastern Europe. It discusses some common features in the region and focus mainly on credit risk as a key risk on banks' balance sheets. Finally, it looks at assessment of banking sector resilience through stress testing and argues such analyses are valuable even in emerging economies that suffer from limited data availability, short time series and structural breaks. A top-down stress test methodology that employs relatively limited information to overcome this data problem is employed. Moreover, as credit growth in emerging economies tends to be rather volatile, a dynamic approach projecting key balance sheet items is more appropriate. [ABSTRACT FROM AUTHOR]

Since 2005 the budgets of European Capital of Culture programme has been significantly focused on large infrastructure projects in the title holder cities, that is, in the area of narrower or wider region. This trend of increasing infrastructure spending (particularly in Western Europe) has been followed by the tendency of assigning titles to midsize and smaller cities - from an average of 1.5 million people per host city in the first decade of the project to approximately 200,000 inhabitants per host city in period until 2012. However, some host cities faced a delay in the execution of infrastructure projects, while some projects were cancelled due to reduced cultural budget - all that as a result of the global economic crisis. Despite financial difficulties in the host cities, European Capital of Culture programme continues - in 2013 one of the two ECoC hosts is the French City of Marseille, in partnership with the region of Provence, with structural projects reaching EURO 660 million despite financial crisis. In 2020 Croatian cities have an opportunity to participate in the programme of the European Capital of Culture for the first time. This will also mean an opportunity to complete urban transformation of the designated city. Infrastructure projects will certainly be of great importance in the selection of the first Croatian ECoC. This paper provides an overview of the infrastructure dimension of ECoC programme, and it tries to predict the ECoC trends, with a particular focus on Croatia and Eastern Europe. [ABSTRACT FROM AUTHOR]

Three hundred years ago China and Europe were about equally poor. Then the West forged ahead of Asian societies, thereby generating rising global income disparities until the end of the 20th century. Since 1979 the Chinese have raised per capita incomes sevenfold. This history of economic performance poses two explanatory challenges. Why did China fall behind Europe or the West? Why has China started to close the income gap recently? Here, a unitary explanatory framework is suggested for answering both questions. Because of weak property rights, lack of scarcity prices, and too little economic freedom, China grew much more slowly than the West. The West benefited from better institutions than China because of political fragmentation resulting in limited government and comparatively free markets. Similarly, China could start its attempt to catch-up with the West only after climbing out of the socialist trap by a de facto improvement of property rights and economic freedom, by 'market-preserving federalism' and by vigorously joining the capitalist world economy. This account of Western and Chinese performance ultimately rests on geopolitics. Interstate rivalry between European states, kingdoms and principalities contributed to safe property rights and the European miracle. Competition between European states forced them to establish limited instead of absolutist government and therefore to provide space for the commercial and industrial revolutions in the West. Similarly, rivalry between the People's Republic of China on the Mainland and the Republic of China on Taiwan, the hostile competition between Communist China and the Soviet Union, the historical rivalry between China and Japan, and the geographical closeness of US troop deployments to China forced the People's Republic of China leadership in the late 1970s to consider the consequences of falling further and further behind the West, Japan, and Taiwan. Thus, geopolitical threat perception has been the midwife of Chinese economic reform policies. The current financial and economic crisis is likely to increase government interference with the economy and to reduce economic freedom in China as well as in the West. [ABSTRACT FROM AUTHOR]

Portugal faced a decade of feeble economic growth after joining the European Economic and Monetary Union. Systematic research of the specific effects of this regime change on growth is still lacking. The counterfactual analysis that we undertake in this paper seeks to fill such a gap. Our findings suggest that the adoption of the Euro did have adverse effects on Portuguese economy. To the contrary, in 2009, the Euro seems to have sheltered the Portuguese economy from the worse effects of the international financial crisis. [ABSTRACT FROM AUTHOR]

The banking sector and the stock market in Europe have been adversely impacted by a series of global financial crises over the last two decades. Major financial reforms were implemented to enhance the stability and competition within the banking sector. Measures were also implemented to create a vibrant stock market in Europe to stimulate economic growth in Europe. This study examines the interactions between stock market development, banking competition, and banking stability in European countries from 1996 to 2016. The purpose of the study is to understand the inter-linkages between these variables to ascertain the spillover impact of policy reforms in the banking sector on the stock market and vice-versa. Using a vector error-correction model, the study finds long-run and short-run inter-linkages between banking competition, banking stability, and stock market development in European countries. The study's most robust result is that banking competition and banking stability stimulate stock market development in the long run. There is also some evidence that healthy competition in the banking sector and stock market development instils greater stability in the banking sector. The results suggest that policy measures put in place to create a vibrant stock market must include elevating banking competition and banking stability, with policymakers being cognizant that causality may be bidirectional. [ABSTRACT FROM AUTHOR]

The unprecedented expansion of sovereign balance sheets since the beginning of the global crisis has given a new meaning to the termsovereign risk. Developments in Europe since early 2010 revealed new challenges for the functioning of private banks in an environment of heightened sovereign risk and may have contributed to deleveraging. The article uses an innovative way of measuring the perception of sovereign risk and its impact. Using an extension of a common market discipline framework, it shows that exposure to sovereign risk may have limited the ability of banks in Europe to collect deposits. Potential identification issues between deposits and bank efficiency are controlled by using data envelopment analysis (DEA). The results are robust to inclusion of conventional measures of bank performance and the sector-wide holdings of foreign sovereign debt. [ABSTRACT FROM PUBLISHER]

At a time of major changes in the geography of the global economy, and following the major financial and economic crises of 2007/2008, the European Union (EU) is marked by deepening uneven economic development, between and within the territories of its 28 (for now) member states. This is one expression of neo-liberalisation as the dominant political force in the EU, combined with deep austerity policies in response to the crises of 2007/2008. Within the Eurozone, a common currency without a common fiscal policy further intensified inequalities, especially between the economies of the north and south of the EU. These developments had profound political ramifications as the promise of increasing economic growth and material well-being has been rudely shattered for many people and unemployment, poverty and ill-being have burgeoned in many parts of the EU. The political response to this – in ways reminiscent of the 1930s – has been a resurgence of regressive virulent right-wing nationalisms, sometimes with fascistic tendencies, as people have come to see the EU, and neoliberal globalisation, as inimical to their interests. This tendency has been further intensified by inflows of migrants and refugees, many in response to neo-imperialist ventures in the Middle East. This is most starkly (so far) the case in the UK, leading to the British Exit from the European Community (BREXIT) vote to leave the EU. There are counter-tendencies, locally based political movements that espouse a more humane social democratic model of the EU, but there seems little chance of these cohering politically to challenge the dominant view. [ABSTRACT FROM AUTHOR]

In this study we empirically investigate the influence of the low interest rate environment adopted by inflation targeting countries from Central and Eastern Europe as a rescue measure after the outbreak of the financial crisis. Moreover, we focus on examining the existence of a Neo-Fisher effect that may explain the positive relation between interest rates and inflation, with causality from interest towards inflation rate. We employ a Vector Autoregressive model, together with an impulse response analysis and a variance decomposition technique, to capture the response of economic growth and inflation to shocks to the monetary policy. Our main results point to a negative relation between policy rates and economic growth, as predicted by the economic literature. However, results show a significant positive relation between interest rates and inflation, meaning that negative shocks to interest rates lead to lower inflation. Also, we find that the response of inflation and economic growth is the same, regardless of the crisis or non-crisis period. [ABSTRACT FROM AUTHOR]

Rousseau and Wachtel (2011) (Rousseau, P., Wachtel, P., 2011, 'What is Happening to the Impact of Financial Deepening on Economic Growth?' Economic Inquiry, 49(1), pp. 276-288) find a weakening effect of bank finance on growth for more recent periods in replicating King and Levine () (King, R. G., Levine, R., 1993, 'Finance and Growth: Schumpeter Might Be Right', The Quarterly Journal of Economics, 108, pp. 717-737) in a heterogeneous sample up to 2004. We contribute by re-examining this finding for a focused set of 26 European countries up to 2009. In the second step, we introduce an aggregated finance variable into the model which accounts for aggregate credit, bond and stock markets. We reconfirm a weakening effect of finance on growth, which is persistent even when dummy variables are added to control for financial crises. The development of European financial markets seems to have not only decoupled from the real sector but also to exert an inverted impact on growth. We attribute our finding to structural change between bank- and market-driven setup, threshold effects and the procyclical nature of financial markets. [ABSTRACT FROM AUTHOR]

Europe is confronted by an intimidating triple challenge—economic stagnation, climate change, and a governance crisis. What is required is a fundamental transformation of the economy to a new, “green” trajectory based on rapidly diminishing emission of greenhouse gases, the authors contend. Much greater emphasis on innovation in all its forms (not just technological) is an answer. Following this path would mean turning Europe into a veritable laboratory for sustainable growth, environmentally as well as socially. [ABSTRACT FROM AUTHOR]

This study uses data for 23 countries elicited from the 2010/11 wave of the European Social Survey to examine the stability of social capital as a predictor of job satisfaction at a time of economic crisis. The analysis reveals a remarkably resilient impact of social capital and its constituent components during the economic downturn. However, this resilience is much less pronounced when the focus is on countries where the crisis was most severe, suggesting an economic development threshold below which certain social capital components lose their associational impact. However, religious activity is significantly associated with workers’ job satisfaction in these economies, providing comfort during times of socio-economic difficulty. The extent of organizational trust, measured by proxy variables for participative decision-making, has by far the strongest association with job satisfaction. This suggests that employers need to think again about the way they treat their employees to maximize the benefits of social capital and, ultimately, improve the job satisfaction scores of their workers. [ABSTRACT FROM AUTHOR]

This article examines the effect of the recent economic crisis on political participation levels in Europe. As the civic voluntarism model and grievances theory predict different effects of economic downturn on political participation, the crisis provides a unique context to evaluate the explanatory power of these two theories. It is found that, when investigating a period of eight years (2002–2010), economic growth is positively associated with non-institutionalised political participation, which is in line with the civic voluntarism model. However, when focusing on the changes in political participation that occurred between 2008 and 2010 it is found that rising unemployment is associated with rising levels of non-institutionalised political participation, suggesting that grievance theory is especially useful in exceptionally negative conditions as suddenly imposed grievances can lead to various forms of protest behaviour. The article argues that these shock experiences can lead to momentary peak periods of mobilisation. [ABSTRACT FROM PUBLISHER]

Small and medium enterprises (SMEs) play a vital role in economic development, they offer the most economical use of capital in relation to job creation and provide the strongest channel for development and innovation. Innovation is recognized as an essential component of the economic growth process, broadly defined as development, deployment and economic utilization of new products, processes and services. SMEs are crucial for helping economies to restructure quickly in response to changing economic, social and market conditions, under the impact of international financial crisis. However, SMEs can fulfill this potential if they obtain the finance necessary to start and develop their businesses. Access to finance is a key determinant for business start-up, development and growth for SMEs, including the innovative ones, and they have different needs and face different challenges. The limited market power, lack of management skills, absence of adequate accounting records and insufficient assets, transaction costs and lack of collateral, all tend to increase the risk profile of SMEs. Moreover, uncertainty and informational asymmetries that characterize SMEs are amplified for innovative SMEs making it more difficult for them to access finance through traditional means. The current economic environment has brought SME needs into particular focus given the significantly tightened credit supply conditions arising from the reduced ability and willingness of banks to provide financing. In order to improve the access to finance for SMEs, the efforts should be focused at the European and national levels on solving the problems regarding working capital, improving entrepreneurship and financial environment in the long term, attracting new financial resources, facilitating dialogue and consultation between governments, SMEs and financial institutions. [ABSTRACT FROM AUTHOR]

Among the measures adopted to tackle the financial crisis in Europe, part of the sovereign debt of the Greek government was restructured in early 2012. The current Greek predicament bears a significant resemblance with Argentina's situation after the 2001 economic crisis. Its sovereign debt restructuring has been challenged before an investment arbitral tribunal by a group of Italian bondholders, who have thus far succeeded at the jurisdictional phase. The Abaclat and others v. Argentina case is the first International Centre for Settlement of Investment Disputes (ICSID) arbitration which deals with a sovereign debt workout. Albeit the award on the merits is still pending, the importance of the dispute cannot be overestimated. It signals a new forum bondholders could use, when they do not participate in an exchange, to still seek to obtain their interest and capital from the debtor State. This article aims at assessing the possibility of analogous developments for Greece, and potentially other Eurozone countries which might need to restructure their debt in the near future. To do so, it compares the historical unravelling of the crises in Argentina and in the Eurozone. It then offers a careful analysis of the recent arbitral decision in the Abaclat case. Finally, it evaluates the potential risks for the Eurozone and reviews several options for action at the European level. [ABSTRACT FROM AUTHOR]

In this reply to Peck, Jabko, Thompson and Streek I seek to highlight the importance of the idea of austerity as driving policy rather than the more material factors that they stress. In particular, I question whether political opportunism, bond market demands for austerity or the greater crisis of growth of the Western economies are really driving events. [ABSTRACT FROM AUTHOR]

Copyright of ifo Schnelldienst is the property of ifo Institute for Economic Research and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Kazakhstan, the Kyrgyz Republic and Uzbekistan are neighbouring countries in post-Soviet Central Asia which share similar culture and language. Their economic structures were similar under central planning: they provided the agricultural basis to the Soviet economy. But, since independence, these economies have grown structurally more heterogeneous due to variations in the implementation of market-oriented reforms, the degree of integration into the global economy and natural resource endowment. This article attempts to demonstrate how this heterogeneity can explain the differing effects of the recent Global Financial Crisis on these countries' economies in general and in the banking sector in particular. [ABSTRACT FROM AUTHOR]

The financial crisis has highlighted the need for an EU framework for bank recovery and resolution. The European Commission proposed on Wednesday a series of measures to introduce European standards in terms of bank recovery and resolution. These standards ensure that in future the authorities will have the means to intervene decisively before the onset of both problems, and in the first phase of a possible crisis. The proposed tools are divided into powers of "prevention", "early intervention" and "resolution". This article aims to show what exactly to aspect from these measures and what European Bank Union means. [ABSTRACT FROM AUTHOR]