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Financial and real crisis in the Eurozone and vulnerable economies

Author

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  • Bruno Dallago

Abstract

The paper looks at the deep and the direct causes of the crisis in the Eurozone and considers what changes are necessary. It shows that, together withfinancial aspects, the Eurozone crisis stems from the difficulties of the real economy and the incompleteness of European institutions. The former include divergent real performances, unsustainable development paths of the Member States, and growing distributive disparities. The consequences of misconceived stabilisation policies magnified the effect of the above factors. The international crisis caused a shock that has had asymmetric effects within the Eurozone due to the divergent economic performances and the different institutions of the member countries. At the same time, European institutional incompleteness deprived member countries of effective policy-making and European policy management and support, thus converting the common currency into a problematic asset. Building on thisframework, the paper critically analyses the institutional and economic reforms necessary to vitalise the process of European integration, and it stresses the urgent need to tackle the real and microeconomic causes ofthe crisis.

Suggested Citation

  • Bruno Dallago, 2013. "Financial and real crisis in the Eurozone and vulnerable economies," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 10(3), pages 295-315, December.
  • Handle: RePEc:liu:liucej:v:10:y:2013:i:3:p:295-315
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    File URL: https://ejce.liuc.it/18242979201303/182429792013100301.pdf
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    Citations

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    Cited by:

    1. Abdulrazag Mohamed Etelawi & Keith A Blatner & Jill McCluskey, 2017. "Crude Oil and the Libyan Economy," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(4), pages 95-104, April.
    2. Pantelis C. Kostis, 2022. "Economic Development and Performance of Eurozone Economies: The Growing Imbalances During the Crisis," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 13(2), pages 1056-1075, June.
    3. repec:liu:liucej:v:14:y:2017:i:1:p:107-120 is not listed on IDEAS
    4. Juneja, Januj, 2017. "How Germany benefits the most from its Eurozone membership," Research in International Business and Finance, Elsevier, vol. 42(C), pages 1074-1088.
    5. Roman Matkovskyy, 2016. "A comparison of pre- and post-crisis efficiency of OECD countries: evidence from a model with temporal heterogeneity in time and unobservable individual effect," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 13(2), pages 135-167, December.
    6. Vittorio Valli, 2017. "European economic policies, stock-flow relations and the great double crisis," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 14(1), pages 109-121, June.

    More about this item

    Keywords

    European institutions; Eurozone; Financial crisis; Real economy; Vulnerability;
    All these keywords.

    JEL classification:

    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • G01 - Financial Economics - - General - - - Financial Crises
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes

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