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Previous research has identified the frames and metaphors used in the reporting on the Euro crisis. War and disease turned out to be the two most frequently used metaphorical frames. Since coverage of the current financial crisis may have a tangible effect on public opinion, research into the effects of metaphorical frames on attitudes is needed. By employing two survey experiments, a student sample (N = 259) and a nonstudent sample (N = 507), this article traces the effects of both metaphorical frames. Our results show that individuals take over the metaphorical frame elements in their evaluation of the Euro crisis. Participants in the war conditions significantly more often referred to war when answering the open questions. Alternatively, when the Euro crisis was framed as a disease, participants were more likely to use words and sentences containing disease frame elements. [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]

This article examines the metaphoric frames in the coverage of the Euro crisis in newspapers across five EU countries. Our quantitative frame analysis identified five dominant frames: war, construction, disease, natural disaster, and game. In all five countries, the Euro crisis as war turned out to be the most prominent news frame. Such framing uses martial, aggressive language to describe the European public sphere. This finding is not without importance, as newspapers play a key role in shaping the general public’s perception of the Euro crisis and by extension the European Union’s institutional elite and its (in)ability to cope with crisis. [ABSTRACT FROM AUTHOR]

Having a European identity is expected to influence citizens’ attitudes and behaviour towards the EU community. European identity is indeed positively related to support for EU integration, but are citizens with a stronger European identity also willing to pay a price for this identification, and to what extent? The contribution provides an answer to these questions by performing multilevel analyses on the EES 2014 data. The analyses show that citizens with a stronger European identity are more supportive of financial solidarity with member states in economic crisis. This explanation for support for solidarity is stronger than explanations provided by self-interest and economic ideological position. Citizens are thus willing to pay a price for their European identity. However, one can only expect so much from European identity as significant interaction effects show that the positive relationship between European identity and support for solidarity is mitigated by experiencing economic hardship. [ABSTRACT FROM AUTHOR]

This article argues that the perforation of national states by immigration, integration and trade may signify a critical juncture in the political development of Europe no less consequential for political parties and party systems than the previous junctures that Lipset and Rokkan detect in their classic article. We present evidence suggesting that (1) party systems are determined in episodic breaks from the past; (2) political parties are programmatically inflexible; and, (3) as a consequence, party system change comes in the form of rising parties. [ABSTRACT FROM PUBLISHER]

Demarcated by growing austerity, economic uncertainty and EU-exits, the past decade witnessed monumental shifts across the political and economic landscapes of Europe. Citizenship is a stabilising force in this era of crisis, particularly for intra-EU migrants. In this contribution, I examine how the Euro crisis impacted citizenship acquisition among these migrants. Building upon the model proposed by John Graeber's article [2016. 'Citizenship in the shadow of the Euro crisis: explaining changing patterns in naturalisation among intra-EU migrants.' Journal of Ethnic and Migration Studies 42 (10): 1670-1692], I discuss the relative importance of citizenship in times of crisis from global and regional perspectives. I argue Graeber's theory presents a strong model for citizenship acquisitions during the crisis, yet leaves the core dyadic structure and several inconsistent findings unexamined. I replicate these models and introduce a dyadic model using bilateral data from 21 receiving and 23 sending states in Europe between 2007 and 2013. Contrary to Graeber's theory, I find citizenship acquisitions among intra-EU migrants primarily coincide with increased in-migration, rather than influences of the Euro crisis. I conclude that while economic sending and receiving contexts matter, the Euro crisis did not appear to restructure intra-EU migrant citizenship incentives. [ABSTRACT FROM AUTHOR]

We examine the transmission of financial shocks among the euro-periphery (Portugal, Ireland, Italy, Greece, Spain), the euro-core (Germany, France, the Netherlands, Finland, Belgium), and the major European Union (but not euro) countries (Sweden, the United Kingdom, Poland, the Czech Republic, Denmark). Using extreme returns on daily stock market data from 2004 until 2013, we find transmission effects for the tails of the returns distributions for the pre-crisis, US crisis and euro crisis periods from the euro-periphery to the non-euro and euro-core groups. During the crises, the shocks transmitted were more substantial, indicating significantly higher losses on extreme return days. [ABSTRACT FROM AUTHOR]

The architecture of the original euro was flawed, and so was the commitment of the EU member states to abide by fiscal orthodoxy. However, both did convey sound monetary principles, these being (1) to preserve the purchasing power of the euro and (2) to isolate it as much as possible from political pressures. As evidenced in the euro crisis, both EU member states and European institutions have committed to maintaining the euro via further integration and the growing centralisation of monetary and fiscal powers in EU institutions. The European Banking Union is one example of this commitment. This article argues that these changes have paved the way for the creation of another modern-state currency: a currency that belongs to a supranational state and that is ultimately linked to an ever-growing supranational treasury that works hand in hand with the central bank. This article offers a more market-friendly monetary alternative to such an arrangement. [ABSTRACT FROM AUTHOR]

In this article it is argued that citizens take into account the degree of a government's political autonomy to implement particular policies when expressing their views on satisfaction with democracy (SWD) but, in order to do so, they need to perceive it. When citizens directly observe the external constraints that reduce their government's autonomy, then variations in levels of regime satisfaction may no longer be exclusively about government performance - as widely argued by political economists - but also about democratic choice. The argument develops after comparing the existing scenarios in the Eurozone before and after the Great Recession. Citizens only began to perceive their own lack of choice to decide between policy alternatives when the sovereign debt crisis broke out in May 2010, the date of the first Greek bail-out. It is then when citizens started to update their beliefs about the functioning of democracy as a system in which alternative policies can be adopted as bail-out deals were signed between national governments from the Euro periphery and the Troika. This updating process towards the way democracy works explains the increasing gap in the levels of SWD between bailed-out economies and the rest of the countries in the Eurozone. Empirical confirmation for this claim is found after analysing Eurobarometer surveys from 2002 to 2014 and using a two-step difference-in-difference analysis that combines individual and aggregate data. [ABSTRACT FROM AUTHOR]

In times of crisis, political leaders are torn between calls for strong leadership and the need to maintain their license to operate amongst their constituents. The predicament of European Heads of State and Government (HSG) during crises provides a particularly strong example of this. For on top of the inherent tension between political leadership and democracy, in the European multi-level system, HSG have to balance the demands of many groups of potential followers while facing weak and contradictory vectors of legitimate leadership. This contribution presents a framework by which the inherent tensions of legitimate European leadership may systematically be assessed. It applies this framework to two HSG that were key to the management of the euro crisis, the German chancellor Angela Merkel and the Greek Prime Minister Tsipras in their attempts to walk the tightrope between legitimate and decisive EU leadership. [ABSTRACT FROM PUBLISHER]

This article considers whether the creation of a budgetary union in the European EMU (economic and monetary union) is a feasible and suitable way to resolve the current impasse created by the euro crisis. The article begins by identifying the major drawbacks concerning the transposition of prescriptions regarding fiscal federalism to the current E(M)U scenario, with the outlook that this appears to be an extemporaneous solution. It then indicates the alternative conception of an incomplete budgetary union, which is mostly characterized by the setting up of specific insurance mechanisms. These alternative measures are shown to be more realistic and feasible, since they combine path dependency with an innovative appropriation of specific features of the classic federalism model, modifying them to an E(M)U scenario in a heterodox way. [ABSTRACT FROM AUTHOR]

This paper analyzes how the apparently merely technical introduction of reversed qualified majority voting for the excessive deficit procedure included in the Six Pack and the Fiscal Compact shifts not only the institutional balance between the European Commission and the Member States but also the relationship between liberalization and social regulation in the EU. In bringing together institutional analysis and a political economy perspective, the paper shows how the strengthening of the Commission's discretionary decision-making authority in a context of intergovernmental power imbalances between debtor and creditor states extends the asymmetry between market-making and market-correction to the area of political decision-making. In consequence, economic and social policies are subordinated to the primacy of austerity. [ABSTRACT FROM AUTHOR]

The eurozone crisis has altered the party political landscape across Europe. The most visible effect is the rise of challenger parties. The crisis not only caused economic hardship, but also placed considerable fiscal constraints upon a number of national governments. Many voters have reacted to this by turning their back on the traditional parties and opting instead for new, or reinvigorated, challenger parties that reject the mainstream consensus of austerity and European integration. This article argues that both sanctioning and selection mechanisms can help to explain this flight from the centre to challenger parties. First, voters who were economically adversely affected by the crisis punish mainstream parties both in government and in opposition by voting for challenger parties. Second, the choice of specific challenger party is shaped by preferences on three issues that directly flow from the euro crisis: EU integration, austerity and immigration. Analysing both aggregate-level and individual-level survey data from all 17 Western EU member states, this article finds strong support for both propositions and shows how the crisis has reshaped the nature of party competition in Europe. [ABSTRACT FROM PUBLISHER]

The Eurozone crisis resulted in a decisive change of Europe’s fiscal surveillance regime that brought the question of public finance oversight sharply into focus. The Stability and Growth Pact, the fiscal cornerstone of Europe’s Economic and Monetary Union (EMU), was fortified, expanded and supplemented by the so-called ‘Six Pack’, the ‘Fiscal Compact’ and the ‘Two Pack’. These substantial initiatives all aimed at strengthening the credibility and enforceability of the EMU’s rules-based economic coordination regime through further formal competence transfer and an improvement of the EU’s problem-solving capacity. This article explains that from a process perspective, their adoption showed an ability of the EU polity to produce agreement and find a way out of its chronic institutional paralysis. [ABSTRACT FROM PUBLISHER]

This article aims to analyze the use of economic metaphors in the particular case of the European sovereign debt crisis, by the examination of the public discourse as reflected in the daily press. Three countries of the European Union with severe sovereign debt problems (Greece, Italy, and Spain) and three countries without them (Finland, the Netherlands, and the United Kingdom) have been selected for analysis. The general hypothesis, in accordance with the research undertaken in similar studies on economic metaphors and on the uniformity of economic journalism frames, is that one can expect a fairly common use of the same metaphors and with the same weight among countries, types of newspapers, and diverse economic conditions. The findings basically support this hypothesis, showing how difficult it is for the media, even when using rhetorical devices such as economic metaphors, to stand aside from the experts’ discourse or to forge new ways of analyzing economic events outside the traditional and prevalent frames. [ABSTRACT FROM AUTHOR]

The euro crisis and a new debate about immigration in Europe have undermined support for the EU while the unsolved Greek debt problems as well as the ECB's quantitative easing policy have raised new crucial policy issues. It is necessary to identify the key issues of Eurozone stabilization and to clarify the economic benefits from monetary integration. As regards the economic welfare analysis of the euro, the new model presented shows the benefits of the euro's reserve currency position, namely in the framework of a neoclassical growth model with seigniorage based on international reserve holdings. Discounted benefits are about 10,000 € per capita in a stable Euro area. Thus the benefits are bigger than often considered, at the same time one may raise the question of whether the existing institutional setting of the Eurozone is sufficient for achieving long-term stability and prosperity. As regards the envisaged third rescue package for Greece it is emphasized that a haircut of public creditors along with adoption of a Greek capital levy plus privatization efforts are required to achieve debt sustainability and growth. The traditional interpretation of subsidiarity in the EU is found to be misleading and the vertical division of politics is destabilizing. [ABSTRACT FROM AUTHOR]

The European crisis has many causes. Worse, the different causes are mutually reinforcing. National economies lost competitiveness within the single currency, governments and households lived beyond their means, banks and other financial firms moved capital across borders and then called it back home again in a fit of panic. Europe is suffering as a consequence. European policy-making is suffering as well. With so many ‘causes’, politicians are dividing their attention across different and at times competing remedies. Europe appears to be ‘muddling through’ rather than acting decisively as a result. This paper argues that European policymakers should focus their attention on financial causal mechanisms. Although there is some truth to claims about lost competitiveness and excessive borrowing, a close focus on financial markets promises to offer the greatest leverage over the largest number of national economies. A close focus on finance also offers a clear choice between competing policy agendas: Europe's politicians must choose either to accept a renationalization of finance or they must embrace reforms necessary to stabilize international financial market integration. Only once that choice is made, and the necessary policy agendas are put in place, should politicians again turn their focus to issues of second-order (if still significant) importance related to market structural reform, fiscal consolidation, or asset market regulation. [ABSTRACT FROM AUTHOR]

Early critics of the euro’s design pointed to the disruptive potential — both political and economic — of country-specific shocks in a monetary union that is a far cry from an optimal currency area. The euro crisis has confirmed the risks associated with a ‘one-size-fits-all’ monetary policy, decentralized financial supervision, and inadequate fiscal backstops. This article examines how the active use of national fiscal policies and macroprudential policies can mitigate these risks. Cross-border coordination of macroprudential policies is essential to ensure their effectiveness. In addition, area-wide reforms are necessary including a more complete banking union with a well-funded common backstop. [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]

In their different ways, the European Central Bank (ECB) and the US Fed combine expertise with representation: key members of these institutions along with their staff are appointed on the basis of their expertise and professional qualifications whereas each organization is conceived, in part, so as to represent the constituent nation-states or regions that make up their currency zones. In this article, the tension between expertise and representation apparent in the constitution of each institution is explored with emphasis on the ways in which geography is represented in monetary policy decision-making. The formal representation of nation-states in the ECB, their voting rights, and the significance or otherwise of large Eurozone countries is also considered. Being an analytical assessment of the effectiveness of the ECB compared with the Fed, the effectiveness of each institution is assessed in the light of financial risk and uncertainty and the complex interplay between monetary policy-making and fiscal federalism. Implications are drawn as regards the management of the Euro crisis has been managed, and the ways in which the welfare of peripheral countries have been discounted. [ABSTRACT FROM AUTHOR]

Until very recently, European employers and political leaders denied the need for any coordination in industrial relations at EU level. In 2011, however, the European Parliament and the Council adopted a new European economic governance regime that makes EU member states' labor policies subject to multilateral surveillance procedures. This paper analyzes this ‘silent revolution’ from above and assesses organized labor's responses to this challenge. It shows that the EU's new governance regime does not follow the classical model of a federal state, but rather the governance structures of multinational corporations that control their local subsidiaries through the use of whipsawing tactics and coercive comparisons. European trade unions' and social movements' difficulties in politicizing European economic governance are thus best explained by the ability of the new supranational EU regime to nationalize social conflicts. [ABSTRACT FROM PUBLISHER]

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]

For many political economists, the loss of monetary sovereignty is the major reason why the Southern periphery fared so badly in the Euro area crisis. Monetary sovereignty here means the ability of the central bank to devalue the exchange rate or to buy government debt by printing the domestic currency. We explore this diagnosis by comparing three countries – Hungary, Latvia and Greece – that received considerable amounts of external assistance under different monetary regimes. The evidence does not suggest that monetary sovereignty helped Hungary and Latvia to stabilize their economies. Rather, cooperation and external assistance made foreign banks share in the costs of stabilization. By contrast, the provision of liquidity by the European Central Bank inadvertently facilitated the reduction of foreign banks’ exposure to Greece which left the Greek sovereign even more exposed. By viewing the Euro area as a monetary system rather than an incomplete state, we see that what is needed for Euro area stabilization is cooperation over banking union, rather than a fully-fledged federal budget. [ABSTRACT FROM PUBLISHER]

The crisis of the euro area has severely tested the political authority of the European Union (EU). The crisis raises questions of normative legitimacy both because the EU is a normative order and because the construction of economic and monetary union (EMU) rested upon a theory that stressed the normative value of the depoliticization of money. However, this theory neglected the normative logic of the two-level game implicit in EMU. It also neglected the need for an impartial and publically acceptable constitutional order to acknowledge reasonable disagreements. By contrast, we contend that any reconstruction of the EU's economic constitution has to pay attention to reconciling a European monetary order with the legitimacy of member state governance. The EU requires a two-level contract to meet this standard. Member states must treat each other as equals and be representative of and accountable to their citizens on an equitable basis. These criteria entail that the EU's political legitimacy requires a form ofdemoicracy that we call ‘republican intergovernmentalism’. Only rules that could be acceptable as the product of a political constitution among the peoples of Europe can ultimately meet the required standards of political legitimacy. Such a political constitution could be brought about through empowering national parliaments in EU decision-making. [ABSTRACT FROM PUBLISHER]

Of the multiple narratives EU policymakers could have chosen at the onset of the euro crisis, why did austerity and structural reform win out over other plausible cures for member states’ problems? Arguably, sovereign debt pooling or more federalized economic governance would have been a solution to member states’ national deficits and competitiveness woes. To understand this puzzle, we draw on the sociology of knowledge literature. We argue that the response to the euro crisis was heavily informed by broader social logics that constructed the problem and the solution heavily toward ordoliberal and neoliberal ideas. Mapping the fate of the Eurobond proposals allows us to trace the complex entanglement of economic policy-making and parse out the ways in which social realities are shaped to make particular policy choices seem inevitable, even as they are themselves the product of social processes. [ABSTRACT FROM AUTHOR]

The crisis in the European currency area is not yet over. Although the situation in the financial markets is currently relatively calm, the economic crisis appears to be bottoming out in most countries. Nevertheless, there are still fundamental design flaws in the Monetary Union. If these are not fully addressed, it will only be a matter of time before a new crisis hits, and a partial or complete breakup of the Monetary Union cannot be ruled out. The economic consequences would be devastating, not least for Germany. To ensure the survival of the European Monetary Union, fundamental reform is required in three problem areas: the financial markets, public finances, and the real economy. In order to give the Monetary Union a stable foundation, all problem areas must be tackled equally; otherwise, due to interactions between these fields, success in one area might be canceled out by a flare-up of the crisis elsewhere. The present article outlines the elements of such a strategy for the institutional restructuring of the Monetary Union. Other articles in this and the next issue of DIW Economic Bulletin focus on the role of the ECB as the lender of last resort, the banking union and bank regulation, Community bonds, a European investment agenda, migration within the EU, a European unemployment insurance scheme, options for fiscal devaluation, and mechanisms for sovereign bankruptcies. [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]

Since the latest financial and economic crisis took hold of the European Union (EU), its economic governance architecture has been undergoing crucial changes. Research into the institutional consequences of these reforms is still fragmented — especially with regard to the function of the European Commission. This article seeks to fill this void by analysing the supranational executive’s role in the four areas that have witnessed the most important changes: financial stability support, economic policy surveillance, coordination of national polices and supervision of the financial sector. The empirical evidence suggests that the Commission continues to be a powerful player in EU economic governance, but its primary role is changing. While its agenda-setting power is decreasing, most decisions in economic governance depend on the Commission to make them work. With more and stronger implementation competences, it may be less visible. But it is not less important. This finding qualifies the degree of intergovernmentalism in economic governance. [ABSTRACT FROM PUBLISHER]

Our article focuses on a question that is at the core of comparative capitalisms (CC) scholarship and historical materialist state theory: What is an appropriate theory of institutions in capitalism? How can we conceptualise institutions in relation to the fundamental contradictions and power relations of capitalism? Starting from the social foundations of institutions, the aim of this article is to show how institutional complementarity and institutional change can be explained through analysing shifting relationships of social forces. With our newly developed method of a ‘historical materialist policy analysis’, in which we have integrated insights of CC approaches, we seek to show how an empirical investigation of relationships of forces can be operationalised. This is briefly illustrated in an analysis of the constellation of forces in the current Euro crisis. [ABSTRACT FROM PUBLISHER]

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France and Germany played a highly visible leadership role during the management of the Euro crisis and the efforts to design a reform governance framework for the Euro area. This article provides a conceptualization of this bilateral leadership, which is then applied to trace the process of Franco-German leadership during the ongoing crisis of the Euro area. Franco-German leadership grew ever more important as the crisis deepened. After the French presidential election of 2012, however, the divergences between the two core states of the Euro area deepened and made the exercise of joint leadership more difficult to achieve. I consider this leadership role to be based on a compromise by proxy logic in which France and Germany, starting from divergent positions, strike bilateral compromises acceptable to other member states that feel their own interests are represented by either France or Germany. Their common capacity to find suitable remedies to cope with crisis, however, is not beyond doubt. The Franco-German approach followed an additive logic, combining the temporary and permanent financial support schemes-a French preference-with a concomitant strengthening of fiscal rules advocated by Germany. In the end, the two governments did not develop a common comprehensive strategy based on a shared conceptual framework. [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]

Italy is firmly in the grip of an austerity programme mandated by the European Union institutions, and executed by an unelected technocrat. This state of affairs is at once the result of the acute and unexpected crisis of the financial and economic integration of the eurozone, and an expression of the failures of the Italian political class. Although the euro crisis has been mishandled by European elites, Italy's long-term economic decline, and the inability of Italian party politicians to generate a sustainable coalition to address Italy's economic problems, hinders an exit from the crisis. [ABSTRACT FROM PUBLISHER]

The Great Recession after 2008 did not turn out to be as deep and severe as the Great Depression of the 1930s. According to the European Commission, this positive result is due to the fact that economic policymakers around the world learned their lessons in stabilizing their financial systems from the Great Depression and, moreover, that particularly the European Union and its economic governance system has become a shelter against negative external shocks in coordinating stabilization policies to maintain aggregate demand.This paper argues that the claim of the European Commission needs some qualifications. The lessons have not been applied appropriately in all EU- and eurozone, in particular-member states. Yet this is not merely the result of mismanagement by individual governments but the systematic outcome of an ineffective and even counterproductive European economic governance system. Although, in the wake of the euro crisis, some crisis control and emergency measures have been established, crisis resolution has failed, as the core of the inefficient governance system-the European Stability and Growth Pact (ESGP)-has not been reformed adequately. [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]