The Euro crisis and contradictions of Neoliberalism in Europe
AbstractNeoliberalism has not given rise to a sustained profit-led growth process, but to a finance-dominated accumulation regime in which growth relies either on financial bubbles and rising household debt (‘debt-driven growth’) or on net exports (‘export-driven growth’). The financial crisis that began in the market for derivatives on the US subprime mortgage market has translated into the worst recession since the 1930s. In Europe the crisis has been amplified by an economic policy architecture (the Stability and Growth Pact) that aimed at restricting the role of fiscal policy and insulating monetary policy and central banks from national governments. The crisis has thus led to a sharp economic divergence between core and peripheral countries. Contrary to the situation in the (export-driven) Germanic core of Europe, the crisis is escalating in the (debt-driven) southern countries of Europe. The paper interprets the policy regime as the outcome of national elites’ attempt to use European integration as a means to constrain nation states. The result is a policy regime that has fatally weakened nation states as regards their fiscal and monetary capacities without creating a European state.
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Bibliographic InfoPaper provided by School of Economics, Kingston University London in its series Economics Discussion Papers with number 2013-2.
Length: 21 pages
Date of creation: 08 Dec 2013
Date of revision:
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Postal: Kingston University London, School of Economics, Penrhyn Road, Kingston upon Thames, Surrey, KT1 2EE, UK
Web page: http://fass.kingston.ac.uk/schools/economics/
More information through EDIRC
Euro crisis; Neoliberalism; European economic policy; European integration; financial crisis; sovereign debt crisis.;
Other versions of this item:
- Engelbert Stockhammer, 2014. "The Euro Crisis and contradictions of Neoliberalism in Europe," Working Papers PKWP1401, Post Keynesian Economics Study Group (PKSG).
- B50 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - General
- E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-04-11 (All new papers)
- NEP-GER-2014-04-11 (German Papers)
- NEP-MAC-2014-04-11 (Macroeconomics)
- NEP-PKE-2014-04-11 (Post Keynesian Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- Eckhard Hein & Lena Vogel, 2008. "Distribution and growth reconsidered: empirical results for six OECD countries," Cambridge Journal of Economics, Oxford University Press, vol. 32(3), pages 479-511, May.
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