euro zone crisis 2010
The euro zone crisis is commonly regarded as a sovereign debt crisis. This definition certainly applies to Greece, but the Irish case represents an almost pure specimen of a banking crisis voluntarily transformed into a sovereign crisis. A debt crisis in two small, peripheral economies could become systemic because the financial system of the euro area is overstretched and highly integrated. Had the Greek and Irish crises occurred when euro zone banks were strong and/or not very interconnected, the euro zone crisis would not have happened.
|This chapter was published in: Steven N. Durlauf & Lawrence E. Blume (ed.) , , pages , 2011, 1st quarter update.|
|This item is provided by Palgrave Macmillan in its series The New Palgrave Dictionary of Economics with number v:5:year:2011:doi:3848.|
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