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The theory of international regime complexity that frames this study specifies expectations for international cooperation stemming from different combinations of hierarchy and differentiation among institutions in regime complexes. This paper compares relationships between regional financial arrangements and the International Monetary Fund in the regional complexes for crisis finance in East Asia, Latin America, and the euro area during 2000-2019 and tests these expectations. Creditor states that sit at the nexus between global and regional institutions are particularly influential in the choice of architecture (the combination of hierarchy and differentiation) for these complexes but are constrained by arrangements inherited from previous decades. Once chosen, the complex's architecture in turn shapes policy adjustment in borrowing countries and influences whether states pursue regime shifting or competitive regime creation when dissatisfied with institutions. These findings generally coincide with expectations, but exceed the degree of policy adjustment that the core theory expected for the euro area. Interinstitutional collaboration, the dynamics of which are elaborated, fills this explanatory gap. The paper concludes that relations among institutions are essential for understanding the outcomes and evolution of regime complexes and underpin a more complete explanation than provided by singular institutionalism, the power-gap hypothesis and other alternative approaches. [ABSTRACT FROM AUTHOR]

The rise of populist parties is a defining feature of political change in the advanced capitalist countries. Whereas a large body of research explores populist parties in domestic politics, we know little about how populist parties of right and left have responded to the transformation of the transnational Eurozone regime. In this paper, we show how the diverse exposure to the costs and benefits of EMU can explain their EU-level economic policy positions and thereby create opportunities for populist alliances across the left-right divide. In the debtor countries of Southern Europe, populist parties of both right and left have resisted demands for neoliberal reform during the Euro crisis while supporting fiscal risk-sharing arrangements during the COVID-19 pandemic, making populist left-right coalitions possible. In the creditor countries of Northern Europe, by contrast, populist right and left parties have been fundamentally divided throughout. Based on case study analyses of Germany and Italy, the most prominent creditor and debtor countries, our findings suggest that populist parties may only find common ground when ‘Brussels’ interferes in domestic policy-making autonomy by imposing neoliberal reform. [ABSTRACT FROM AUTHOR]

Do integration crises reinforce legal differentiation in European integration? Are differentiated EU policies under stress prone to cascading opt-outs? We argue that integration crises as such are unlikely to cause further fragmentation in already differentiated EU regimes. If the EU decides to adopt new treaties and laws in response to the crises, however, these are likely to reproduce and extend pre-existing patterns of differentiation. Empirically, this study offers within-case counterfactual analyses of differentiation in the Euro and the migration crises. Whereas the Euro crisis triggered a major institutional change in the Eurozone, the member states could not agree on a thorough reform of the asylum system. Correspondingly, we observe excess differentiation in the Euro crisis but stable differentiation in the migration crisis. [ABSTRACT FROM AUTHOR]

During recent years, central banks have increased the levels of their international reserves at an unprecedented pace. In this paper, we introduce new country-specific reserve data and examine determinants of the composition of international reserves. Using a dataset of 36 countries (and the euro area) for the years from 1996 to 2016, we identify currency pegs and trade patterns as determinants of currency compositions. Our results emphasize the importance of transaction motives for the composition of currency reserves. The euro crisis appears to have been a setback for the euro, which temporarily seemed to challenge the US dollar as the most important international reserve currency and potentially impacted the determination of international reserve compositions. [ABSTRACT FROM AUTHOR]

The architecture of European labour policy has changed in the past years of the euro crisis and its management. While in the pre-crisis phase EU labour policy still had a mainly symbolic character, the EU crisis management gave it a much more binding character. The article analyses the continuities and shifts in European labour policy against the background of austerity and crisis policy arguing that a new labour policy complex was able to emerge at the European level. While institutional shifts were considerable, the market-liberal orientation of labour policy remained in place. However, it was radicalized with the resilience approach. The article therefore provides an overview of the continuity and change of European labour policy in the euro crisis on the basis of institutional and discursive shifts. [ABSTRACT FROM AUTHOR]

Scholars regularly mobilise the concept of policy paradigm to characterise successive periods in which certain ideas appear to structure policymaking. While this concept proved useful to establish that ideas matter, it is time to start thinking about ideas in ways that better resonate with actors' practices. This article introduces and empirically illustrates two conceptual alternatives. First, it looks at international monetary relations from 1944 through the early 1970s. Instead of simply labelling this period as 'Keynesian,' it shows that the enduring centrality of gold was a pivotal practice among policy makers. Second, it considers the governance of the Eurozone in the run-up to the crisis of the 2010s. Rather than viewing this period as 'neoliberal,' it highlights a new discursive repertoire of governance that produced both austerity and unconventional policies. In sum, practices and repertoires help to make sense of elements of continuity, ambiguity and contestation that are often obscured by ideational analysis. [ABSTRACT FROM AUTHOR]

This article analyses the development of financial assistance in the Eurozone since 2010. It argues that reforms to instruments and bodies, notably the European Financial Stability Facility, the European Stability Mechanism, and the current Covid-19 recovery fund, are best explained by a re-occurring pattern of negotiations between potential creditors and debtors based on common Eurozone interests and national cost-benefit considerations. Building on a liberal intergovernmentalist approach, this article shows how this pattern influenced the step-by-step reform of financial assistance in the Eurozone. The threat to Eurozone stability served as a constant factor encouraging member states to expand and deepen the assistance formula. Creditors’ cost-benefit considerations were key for retaining disincentives, a limited liability for common debt, and intermediary borrowing and lending within the financing design. However, on the back of common Eurozone interests, debtors were able to push for an increase in assistance, an expansion of assistance into areas of banking sector support, and a softening of moral hazard elements in the more recent Covid-19 pandemic. Due to creditors’ continuous insistence on safeguards and limited burden-sharing, reform outcomes were repeatedly unable to resolve the difficulties at hand.

The article systematically reviews EMU governance reforms implemented, policy instruments introduced and further institutional reforms currently under discussion with a view of how far they have addressed the institutional shortcomings of the euro-area architecture, which have led to the euro crisis of 2010ff. It further explores how far these reforms have helped to prevent a replay of that crisis when the COVID-19 pandemic hit the euro area. To this end, the article first reviews the academic debate about the causes of the euro crisis that started with the Greek sovereign debt crisis in 2010. In a second step, it evaluates the reforms implemented since the onset of the euro crisis and during the COVID-19 crisis with regard in how far these reforms have addressed or could address the causes of the crisis and gives an outlook on potential forthcoming problems. [ABSTRACT FROM AUTHOR]

This paper1 scrutinizes the transformation of the European economic governance. This is a framework conceived by European Union decision-makers to establish institutions and processes – coordination and harmonisation of economic policies – in order to achieve economic and social development for the European Union and its citizens. Prior to the global financial crisis, the European economic governance was incomplete, poorly coordinated and in certain macroeconomic areas insufficient. The international financial crisis and the “Euro crisis” compelled a much deeper and more comprehensive governance structure from the decision-makers of the European Union. Despite the rapid emergence of Community-level crisis management mechanisms, ad hoc responses and processes prevailed till the turning point of the “Euro crisis” in 2012. Since then, the transformation the European economic governance continued in a heavily institutionalized and coordinated form, providing a long-term vision for the European Union and the Eurozone. European economic governance has been substantially expanded, institutional arrangements cover fiscal policy, monetary policy, the supervision of the financial system, policies related to structural and competitiveness issues. Moreover, comprehensive and coordinated reform strategies were launched, based on the European Commission’s priorities. In this paper, we carry out a simple analysis to detect whether the new European economic governance has corrected the pre-crisis country-specific risks and institutional flaws.

The euro crisis has shaken up the euro zone. It pushed the boundaries of political conflict, it triggered the most intensive period of decision-making so far and ultimately led to a set of institutional reforms, which define new domains of euro zone decision-making, such as in the case of financial assistance, and assign new roles to different political actors. At last, the crisis became the focal point of scholarly debate and new research activity, some of which has been finalised only more recently. This warrants new debate. In this debate section a group of scholars from political science and legal studies, who have contributed to the study of euro crisis decisionmaking and euro zone development in the context of recent collaborative research projects, discuss who leads the euro zone. Most importantly, they debate what we can learn from crisis decision-making and euro zone politics in recent years more broadly for the question of who leads the euro zone today and who may determine its future policy decisions and institutional reform trajectory. [ABSTRACT FROM AUTHOR]

Euro zone economic governance is determined by governments, as member states resist ultimate transfers of authority to traditional supranational institutions. Neither crisis-driven institutional change nor later reform initiatives have altered this predominant role of domestic executives. The Commission cannot exercise ultimate decision-making powers in the domain of economic governance unilaterally. Instead it is co-opted to what could be called a collective euro zone executive of member state governments. The latter act by consensus or not at all. The democratic pathologies of European politics imply that governments remain reluctant to vacate their seats in euro zone governance. So far, governments have consistently opted for making collective decisions and have chosen to circumvent domestic actors when the euro was at risk. However, governments shy away from forward-looking reforms, which have redistributive implications and are beyond their future control, as they remain uncertain of their own legitimacy when deciding on the euro's future. [ABSTRACT FROM AUTHOR]

Employing a multidimensional conception of power shows how interaction between EU institutional actors is structured by different kinds of power – coercive, institutional and ideational – and that none of these are sufficient on their own for actors to successfully drive the reform process. We ask not just who leads the euro zone, but how interactions between actors enable the polity to achieve (or not) its goals. This requires thinking of power in terms of both zero-sum and positive-sum outcomes, which reveals the weakness of the polity as a whole, whatever the power of different institutional actors. In this view, key for the long-term sustainability of the euro zone is an economic and political rebalancing among its members borne out at the level of common ideas and institutions and the leadership of the most resourceful member states. Despite significant reforms in wake of the crisis, such rebalancing seems far beyond the horizon. [ABSTRACT FROM AUTHOR]

This article analyses the development of financial assistance in the Eurozone since 2010. It argues that reforms to instruments and bodies, notably the European Financial Stability Facility, the European Stability Mechanism, and the current Covid-19 recovery fund, are best explained by a re-occurring pattern of negotiations between potential creditors and debtors based on common Eurozone interests and national cost-benefit considerations. Building on a liberal intergovern-mentalist approach, this article shows how this pattern influenced the step-by-step reform of financial assistance in the Eurozone. The threat to Eurozone stability served as a constant factor encouraging Member States to expand and deepen the assistance formula. Creditors’ cost-benefit considerations were key for retaining disincentives, a limited liability for common debt, and intermediary borrowing and lending within the financing design. However, on the back of common Eurozone interests, debtors were able to push for an increase in assistance, an expansion of assistance into areas of banking sector support, and a softening of moral hazard elements in the more recent Covid-19 pandemic. Due to creditors’ continuous insistence on safeguards and limited burden-sharing, reform outcomes were repeatedly unable to resolve the difficulties at hand. [ABSTRACT FROM AUTHOR]

Hailed initially as the country’s saviour for saving Italy from default, Mario Monti’s technocratic government (2011-13) ended in controversy and with its achievements questioned. Aware of this contested legacy, this article seeks to revisit Monti’s term in office and to assess his approach to the crisis that engulfed Italy and the eurozone in 2011-12. In doing so, it looks primarily at Monti’s European policy, but also briefly examines his domestic agenda. Monti’s legacy has so far drawn very limited academic interest. By filling a gap in the existing literature on contemporary European and Italian affairs, this article aims to improve our understanding of a critical phase in the recent politics and foreign policy of one the key EU member states.

The euro crisis and its lessons are still not a closed chapter for economists and policy makers. The challenge to find the most appropriate ways to prevent intra-area imbalances is still on the top of the agenda. Nominal adjustment (internal devaluation) remains one of the most critical aspects of this debate. Many are indeed interested in whether austerity measures in several countries "made sense." But much more is at stake here than evaluating the past. The true question is whether the eurozone can rely on nominal adjustment to align internal economic fluctuations. This paper contributes to the answer by investigating the size of price changes and their impacts on output and trade in the wake of the euro crisis. Selecting the most appropriate variables to measure competitive outcomes, the basic idea of "expansionary contraction" is tested. We rely on a comprehensive panel of all Eurozone member states in the post-crisis years (2010–2017). The results suggest that flexible price levels cannot be taken for granted, and a link to competitiveness is not self-evident, either. Other channels of adjustment may prove to be more important, but scaling them up will ultimately require a sound consensus on the future architecture of the euro. [ABSTRACT FROM AUTHOR]

The European Central Bank (ECB) emerged from the sovereign debt crisis as one of the most powerful supranational institutions. Against this background, this article explains how and why the ECB became empowered during the euro area crisis. Building on the delegation, governor's dilemma, and epistemic community approaches, we argue that the ECB ability to play a strong role in this empowerment process and to convince member states to entrust it with more competences was the outcome of a combination of three factors: limited cohesiveness within the collective principal (Eurogroup); a fiduciary relationship characterized by broad discretion and independence on the trustee side (ECB); and strong specialization with the ECB acting as epistemic entrepreneur. We illustrate our argument with two cases: the Trichet letters exemplify an autonomous emergency empowerment and the introduction of the single supervisory mechanism demonstrates ECB influence on institutional design decisions in negotiating processes. [ABSTRACT FROM AUTHOR]

Theoretical approaches to European integration often downplay and sometimes ignore the role of external actors. But the regime complex through which the euro crisis of 2010-2015 was prosecuted involved the United states directly and indirectly through the IMF. Tracing such external involvement shows that, although they preferred greater deepening of euro area institutions than was achieved, U.S. and IMF officials nonetheless contributed substantially to the creation of the EFSF/ESM, robust ECB action and launch of the banking union project. The conclusion formulates falsifiable expectations on which a theory of external influence in regional integration can be developed and tested. [ABSTRACT FROM AUTHOR]

The objective of this article is to analyse the costs of responsible governance on the national political establishment of the Eurozone in the aftermath of the 2008 global financial crisis. Our analysis tests two main hypotheses. First, we argue that financial crises like the one unleashed by the global financial meltdown of 2008 have an asymmetric impact on the electoral records of establishment parties depending on whether the countries affected by the financial crisis were financially intervened in or not. Our second hypothesis states that externally imposed austerity affects Left and Right national establishment parties differently. By choosing to act responsibly, that is, assuming the conditions of the intervention, the establishment Left pays a much larger electoral price than the one paid by the establishment Right under the same circumstances. To test our argument, we use a panel data set of 12 countries from the Eurozone in the period between 1999 (stage III of the monetary union) and 2015 that contains 54 country-election-year observations. Our findings show strong support for our two hypotheses. [ABSTRACT FROM AUTHOR]

Employer organizations have been presented as strong promoters of the liberalization of industrial relations in Europe. This article, in contrast, argues that the preferences of employers vis-à-vis liberalization are heterogeneous and documents how employer organizations in Spain, Italy, and Portugal have resisted state-led reforms to liberalize collective bargaining during the Euro crisis. It shows that the dominance of small firms in the economies of these countries make employer organizations supportive of selective aspects of sectoral bargaining and state regulation. Encompassing sectoral bargaining is important for small firms for three reasons: it limits industrial conflict, reduces transaction costs related to wage-bargaining, and ensures that member firms are not undercut by rivals offering lower wages and employment conditions. Furthermore, the maintenance of sectoral bargaining and its extension to whole sectors by the state is a matter of survival for employer organizations. The article presents rationales for employer opposition to liberalization that differ from the varieties of capitalism approach. [ABSTRACT FROM AUTHOR]

The Fiscal Compact had seemed to be one of the lessons learned from the Euro crisis. It was supposed to ensure that member states follow more ambitious fiscal targets. First results however show that fiscal indicators have not substantially improved. Public debt is higher than at the beginning of the crisis and consolidation efforts were limited. The outook for European public debt and the stability of the Eurozone is thereby not promising. [ABSTRACT FROM AUTHOR]

This paper1 scrutinizes the transformation of the European economic governance. This is a framework conceived by European Union decision-makers to establish institutions and processes - coordination and harmonisation of economic policies - in order to achieve economic and social development for the European Union and its citizens. Prior to the global financial crisis, the European economic governance was incomplete, poorly coordinated and in certain macroeconomic areas insufficient. The international financial crisis and the "Euro crisis" compelled a much deeper and more comprehensive governance structure from the decision-makers of the European Union. Despite the rapid emergence of Community-level crisis management mechanisms, ad hoc responses and processes prevailed till the turning point of the "Euro crisis" in 2012. Since then, the transformation the European economic governance continued in a heavily institutionalized and coordinated form, providing a long-term vision for the European Union and the Eurozone. European economic governance has been substantially expanded, institutional arrangements cover fiscal policy, monetary policy, the supervision of the financial system, policies related to structural and competitiveness issues. Moreover, comprehensive and coordinated reform strategies were launched, based on the European Commission's priorities. In this paper, we carry out a simple analysis to detect whether the new European economic governance has corrected the precrisis country-specific risks and institutional flaws. [ABSTRACT FROM AUTHOR]

Rather than halting European integration, the euro crisis, in some ways, has accelerated it. However, it is integration of a different type, which departs significantly from the rule of law-based model of integration that traditionally burnished the European Union’s legitimacy. The crisis-induced transformation of the European Central Bank (ECB) captures this trend. Through schemes such as Outright Monetary Transactions, the Bank bolstered its capacity to stabilize the euro without having its mandate formally enlarged, thus confirming the ascendency of technocratic, and often ad hoc, governance over democratically and legally circumscribed alternatives. This article posits the ECB’s expanded and politicized role as the manifestation of a new mode of integration - integration through the disintegration of law - which inverts the court-driven integration-through-law that consolidated the single market. However, the lack of a solid legitimacy base casts doubt on the long-term sustainability of this integration mode. [ABSTRACT FROM AUTHOR]

Abstract This paper investigates the relationship between sovereign bond holdings of banks and refinancing operations by the ECB for countries in the euro area. We use data collected by Bruegel as well as a new dataset compiled from the annual statements of national central banks to estimate panel regression models. Our findings support the hypothesis that the ECB's refinancing operations have increased resident banks' exposure to domestic sovereign bonds. This is in line with the moral suasion theory advanced in the literature. These results strengthen the case for regulatory changes aimed at reducing the sensitivity of banks to sovereign risk. [ABSTRACT FROM AUTHOR]

Abstract: Preserving the trust of bond markets is crucial for the world's many indebted countries, but it is still unclear when and how national or international actors can contribute to this goal. We present a set of arguments addressing this question and test them on the case of the eurozone debt crisis. Distinguishing between actors' capacity and willingness to avoid defaults, we argue that the crisis was marked by a lack of capacity at the national level, and limited or uncertain willingness at the European level. Accordingly, we find that European‐level efforts to reassure markets had considerably stronger effects than similar efforts at the national level. Furthermore, national efforts appear to have mattered the least in countries with the least capacity. These findings are based on a comprehensive new dataset of political events and relevant news, and they hold across a number of robustness checks and placebo tests. [ABSTRACT FROM AUTHOR]

In mid-November 2011, Prime Minister Silvio Berlusconi tendered his formal resignation to President Giorgio Napolitano. It was a humiliating ‘political exit’ for the controversial Italian leader who had been the dominant figure in Italian politics since the mid-1990s. With Italy in the throes of an unprecedented financial crisis, Berlusconi’s squabbling centre-right coalition had appeared increasingly incapable of dealing with the economic emergency engulfing the country. To restore credibility, Napolitano appointed Mario Monti who quickly put together an emergency government. Since then, the downfall of Italy’s longest-serving post-war prime minister has generated a good deal of controversy. Allegations that Berlusconi was pushed out of power by a cabal of domestic and international detractors have been rife both inside and outside Italy. But how plausible are these claims? Was Berlusconi brought down by a conspiracy orchestrated by Napolitano and instigated by Italy’s EU partners? This article will address these questions and, to do so, it will chart the dramatic events that led to his downfall and examine the international and domestic contexts in which these events took place. [ABSTRACT FROM AUTHOR]

In recent years, Europe has been facing the Euro crisis, questioning the whole process of European integration. However, scholars argue that this crisis also presents an opportunity for the Europeanization of national public spheres as public attention regarding Europe has increased. Therefore, this study examines the media discourse on the crisis and the possible convergence of the national public spheres of Germany and Spain. It investigates how the issue is framed and who participates in the discourse during the crisis between 2010 and 2014 in German and Spanish online quality newspapers. Based on a content analysis of 7,256 statements in 961 articles, frames were identified in a data-driven approach. Results show that German and Spanish media have Europeanized their framing during the crisis and mainly support Europe's policy. This convergence has occurred despite a slight renationalization of discourse participants, indicating that Europeanization has been increasingly sustained by national actors. [ABSTRACT FROM AUTHOR]

Hailed initially as the country's saviour for saving Italy from default, Mario Monti's technocratic government (2011-13) ended in controversy and with its achievements questioned. Aware of this contested legacy, this article seeks to revisit Monti's term in office and to assess his approach to the crisis that engulfed Italy and the eurozone in 2011-12. In doing so, it looks primarily at Monti's European policy, but also briefly examines his domestic agenda. Monti's legacy has so far drawn very limited academic interest. By filling a gap in the existing literature on contemporary European and Italian affairs, this article aims to improve our understanding of a critical phase in the recent politics and foreign policy of one the key EU member states. [ABSTRACT FROM AUTHOR]

Sovereign debt restructuring played a key role in placing the US federal government on a sound financial footing under its new Constitution in 1789. State governments in the US, like national governments in the euro area, do not have bankruptcy protection. US state governments have not defaulted since the Great Depression, owing to a credible no-bailout policy by the federal government coupled with fiscal rules and an effective signalling of default risk by private markets. At the municipal level in the US, bankruptcy protections apply and recent default experience is very low. With permanent sovereign bailout mechanisms in place in the euro area, sovereign bankruptcy provisions might lessen officially induced moral hazard, allowing market discipline to function more effectively with respect to euro area countries than previously. [ABSTRACT FROM PUBLISHER]

When countries face balance-of-payments crises, their policy responses vary widely. This article argues that the choice between the two main options of internal adjustment (i.e., austerity and structural reforms) and external adjustment (i.e., exchange-rate devaluation) depends on how costly each of these strategies is for a country overall. Although the choice of adjustment strategy is thus structurally determined, the level of political conflict associated with crisis management depends on both the national vulnerability profile and partisan interests. Moreover, irrespective of the adjustment strategy, all governments design the specific reforms in ways that shelter their own voters. Empirically, this article uses qualitative case studies and survey data to examine the significant variation in crisis responses, crisis politics, and distributive outcomes of the 2008-2010 global financial crisis in eight Eastern European countries. The article concludes with a discussion of the implications of the Eastern European experience for crisis politics in the Eurozone crisis. [ABSTRACT FROM AUTHOR]

A crisis can reveal characteristics of a political order which in normal times remain invisible. Two such moments of clarification hit European Union (EU) countries in quick succession. The euro crisis tested the resolve of leaders and peoples to save the single currency. The geopolitical standoff around Ukraine necessitated a joint response to a show of force. In both cases we saw a 'return of politics'. Geopolitical interests trumped economic ones; a need for government (and not just governance) made itself felt; European politics became more salient and intertwined with domestic politics. In the turmoil, notwithstanding calls for a big leap toward greater unity, the European Union also showed its dynamic in-between nature. The public perceives this politicisation perfectly, hence both its disenchantment and the calls for more democracy. EU integration, after 'permissive consensus' and 'constraining dissensus', could be moving to the era of binding dissensus. [ABSTRACT FROM AUTHOR]

In this article we examine the constraints on Germany's influence over reforms of the Economic and Monetary Union's (EMU) macroeconomic governance regime. Drawing on the insights of historical institutionalism, we show that the German government's control over the process is constrained by the increased sunk costs of European monetary integration and the unintended negative spillovers from its management of the eurozone crisis. While the German government attempted to promote the domestic societal interests underpinning its creditor preferences by deflecting the burden of macroeconomic and institutional adjustment onto the debtor countries, negative feedback loops linked to the pursuit of these preferences induced it to accept a less orthodox and increasingly accommodative central bank to make the EMU sustainable. [ABSTRACT FROM AUTHOR]

We examine the relationship between credit ratings and bond yield spreads of peripheral countries in the euro area (Greece, Ireland, Italy, Portugal and Spain) for the period 1995–2014. Since 2012, bond spreads of those countries have come down very fast, whereas credit ratings have hardly changed. Our results suggest that credit rating agencies have become more cautious and have changed their approach to assess credit risk of sovereigns, and that the impact of sovereign credit risk ratings on sovereign bond spreads has changed. [ABSTRACT FROM AUTHOR]

This paper presents an interpretation of the European crisis based on balance-of-payments imbalances within the Eurozone, highlighting the role of the “internal” real exchange rates as a primary cause of the crisis. It explores the structural contradictions that turn the euro into a “foreign currency” for each individual Eurozone country. These contradictions imply the inability of national central banks to monetize the public and private debts, which makes the euro crisis a sovereign crisis similar to those typical of emerging countries, but whose solution presents additional obstacles. [ABSTRACT FROM AUTHOR]

This paper analyzes through what channels the euro crisis affected firms and the efficacy of policies to mitigate the crisis. It analyzes stock price responses for 3,045 nonfinancial firms in 16 countries to four key policy events during 2010-11. Using precrisis benchmarks, it separates financial effects from trade effects and examines how bank and trade linkages propagated shocks. It finds that policy measures affected financially dependent firms more, particularly in creditor countries with greater bank exposure to peripheral euro countries, in statistically and economically significant ways. Trade linkages with peripheral countries played little role, although euro movements meant some differential effects. [ABSTRACT FROM AUTHOR]

This study identifies commonalities between two historical incidents of debt assumption - in the United States in 1791 and in present-day Europe. By comparing the interests and behaviour of key players in these two incidents, we find three major parallels: first, in their strategic interactions, parties both for and against debt mutualization raise arguments based on notions of fairness and morality; second, in both historical episodes we find harsh rhetoric levelled against private creditors, who are derided as greedy speculators; third, bargaining is an essential element of the debt assumption process. Bargaining is directed toward limiting or expanding the scope of debt assumption. Further, bargaining typically leads to some form of conditionality imposed in order to increase the chances of the debts being repaid or to ensure benefits accrue to the parties assuming the debt. [ABSTRACT FROM AUTHOR]

This paper argues that the loose monetary policy of two of the world's most important financial institutions--the U.S. Federal Reserve Board and the European Central Bank--were ultimately responsible for the outburst of global financial crisis of 2008-09. Unusually low interest rates in 2001-05 compelled investors to engage in high risk endeavors. It also encouraged some governments to finance excessive domestic consumption with foreign loans. Emerging financial bubbles burst first in mortgage markets in the U.S. and subsequently spread to other countries. The paper also reviews other causes of the crisis as discussed in literature. Some of them relate directly to weaknesses inherent in the institutional design of the European Monetary Union (EMU) while others are unique to members of the EMU. It is rather striking that recommended remedies tend not to take into account the policies of the European Central Bank. [ABSTRACT FROM AUTHOR]

The euro crisis has called into question the structure of inter-state compromises on which the European Union was based and that the 2009 Lisbon Treaty finally formalized. Those compromises created a Eurozone distinct from the EU, with a centralized monetary policy and a multiplicity of national economic policies, at their turn coordinated within the intergovernmental institutions of the European Council and the Council. The Eurozone was prevented from setting up an economic governance model able to manage the common currency as in other federal unions. Indeed, the Eurozone could not rely on a specific fiscal capacity and a political authority for governing asymmetric shocks and macroeconomic imbalances. The euro crisis has dramatically shown the pitfalls of the Eurozone governance model. A new perspective needs to be elaborated in order to set up a model for the governance of the Eurozone at the same time effective and legitimate. In order to constitute this new model of economic governance, an institutional differentiation should be introduced between the Eurozone and the no euro area member states. This differentiation would require a Treaty reform in order to constitutionalize the Eurozone as a political union, preserving at the same time the inclusive framework of the internal market for all the states of Europe. [ABSTRACT FROM AUTHOR]

The euro crisis points towards the limits of the post-war pro-European integration consensus in Germany, a trend that has manifested itself in both the legal and political realms. In the legal arena, the powerful German Constitutional Court (GCC) has heard complaints on several key rescue measures, including the European Stability Mechanism (ESM) and the European Central Bank's (ECB) bond buying programme. The Court's ruminations on these initiatives both reflect and feed German eurosceptics' concerns. They also have implications for the Eurozone as a whole, insofar as they limit the German government's room to manoeuvre. In the political arena, a new eurosceptic party, Alternative für Deutschland (AfD), contested the September 2013 federal election and the May 2014 European parliamentary election, winning a handful of seats in the latter. AfD's emergence potentially marks a shift towards a more overtly eurosceptical political discourse in Germany. Thus, both legal and political developments have the potential to constrain the choices for the EU as a whole by reconfiguring the political and policy landscape of Germany, the Union's reluctant hegemon. [ABSTRACT FROM AUTHOR]

How has the Eurozone crisis been covered in the Italian press? Who has been identified as bearing the main responsibility for the crisis? What is the image of the European Union (EU) that has emerged from this coverage? This article aims to answer such questions through a content analysis of four Italian newspapers (Il Sole 24 Ore, Corriere della Sera, la Repubblica and il Giornale) during 11 periods between 2010 and 2012. In our perspective, the topic we address is particularly important for two reasons: first, because the continuing Euro crisis is the most significant threat facing the EU's very existence since its formation, and second, because the media, through the coverage they provide, contribute to build both Europe and the support it needs to prosper. [ABSTRACT FROM AUTHOR]

Our paper investigates the impact of the global and the Euro crisis on citizens’ attitudes towards the European Union (EU). We measure the impact of the Euro crisis on two different levels: First, the crisis itself at the contextual level and second, and more importantly, at the individual level, referring to citizens’ perceptions of the crisis. Our main assumption is that during the crisis, economic explanations find their way back into the study of EU support. We test our hypotheses with 27 EU member states using different Eurobarometer surveys and apply descriptive statistics as well as multi-level regression analyses. Three conclusions emerge from the analysis: First, the impact of the Euro crisis is stronger than in the case of the global financial crisis. Second, support for the EU depends on both the contextual and the individual level although effects of the latter are more prevalent. Third, the effect of the individual perception of the crisis on EU support is stronger in Euro countries as well as in economically powerful countries. Altogether and contrary to major assumptions following post-functional arguments, our findings show that in times of the crisis economic factors again play a major role in the explanation of support for the EU. This leads to a rather critical evaluation for the future of the European integration process. [ABSTRACT FROM PUBLISHER]

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The Euro area is experiencing a severe and highly complex crisis. It comprises three problem areas: the difficulties of some highly indebted European sovereigns to ascertain funding at palatable cost, the disconcerting fragility of the European banking system and disappointing growth prospects in the Euro area periphery. To make matters even worse, these problems have developed into a systemic crisis of the European Monetary Union (EMU), since observers have apparently developed fundamental doubts over its integrity. To overcome this systemic crisis, it would not be sufficient, if only the stronger Euro area economies provided more solidarity, nor would it be sufficient, if only all of Europe adhered to ironclad budgetary discipline from now on. A European Redemption Pact could be a strong political commitment to the EMU and offer a bridge between the proponents of fiscal discipline and structural reform and those governments advocating more support. This pact would entail two indispensable aspects, the codification of a credible and coherent reform path and a temporary and limited instrument for joint refinancing. [ABSTRACT FROM AUTHOR]

Do the Japanese see the EU as a global power? How do they see the causes of the financial crisis in the euro zone, and are they changing their perception of the EU because of the Euro crisis? Regulatory power is defined as a country's or an international organization's power to set up its national or regional rules and standards as global rules and standards. Do the Japanese see the EU's 'regulatory power' as strong, and do they think the EU's 'regulatory power' declined because of the financial crisis in the euro zone? This paper presents the results of an analysis of questionnaire data as well as an investigation of newspaper articles in order to examine the Japanese perception of the EU empirically, and it also discusses academic works that relate to the result of the empirical analysis. The October 2012 questionnaire results show that the Japanese public has an impression that the EU is a global power rather than a regional power. In Japan, both business elites and university students generally think that the EU has strong power in the area of economics. However, the Japanese business elites feel that the EU's power is declining because of the financial crisis. The Euro crisis has thus negatively affected the EU's regulatory power. Even so, as the October 2012 questionnaire results show, more than 40% of Japanese business elites believe that the regulatory power of the EU has not declined even after the beginning of the Euro crisis. However, Japanese business elites continue to be anxious about the EU's regulatory power. [ABSTRACT FROM AUTHOR]

The Euro Zone (EZ)'s economies are under great stress since last decade's financial crisis. Diverging interest rates, high debt burdens and sluggish growth in several member countries led to various rescue activities. Nevertheless, financial markets have still not calmed and the break-up of the EZ is discussed openly. Contrary to the popular belief I show that the Euro itself has been a success story so far but that the EZ suffers under a debt crisis and huge economic imbalances. An overhaul of the EZ's institutional framework is necessary. [ABSTRACT FROM AUTHOR]

With the parallel to the negative effect of the global crisis on the world economy, the economies in the EU started to give negative signals. The member countries such as Greece, Ireland, Portugal and Spain seeing the first negative effects of the global crisis are located in the periphery of the continent. Among these countries, Greece is more important with respect to the depth of its ongoing crisis, its observed effects and being an initial example. This is the biggest financial crisis since the EU accepted the euro as a single currency and Greece involved in the Euro Region in 2001. Like some of the other member countries in EU, Greece has a huge amount of sovereign debts and budget deficit. The most sovereign debts in Greece were taken from financial institutions located in central countries such as Germany, France and Belgium. It is possible that the problems caused by the Greek non-performance issue could spread over Euro Region and that risk could affect directly currency union at first, then economic and political structure of the EU and create some problems for maintaining of its single currency, namely the euro and also the ECB. Called recently as a "naughty boy" or a "sick man" in the EU, Greece has created an important test atmosphere with regard to the integration and control of EU countries' monetary and economic policies and the creation of common policies against global crisis. It became a laboratory country for the Union. Taking into consideration the process, the ongoing problems in the EU currency system after global crisis will be debated around the notion of "Greek Crisis" in our work. [ABSTRACT FROM AUTHOR]