Eurozone crisis: beggar thyself and thy neighbour

By C. Lapavitsas, Annina Kaltenbrunner, D. Lindo, J. Michell, Juan Pablo Painceira, E. Pires, J. Powell, Alexis Stenfors, Nuno Teles. 2010

186 citations recorded by the source corpus.

The sovereign debt crisis that broke out in Greece at the end of 2009 is fundamentally due to the precarious integration of peripheral countries in the eurozone. Its immediate causes, however, lie with the crisis of 2007–2009. Speculative mortgage lending by US financial institutions and trading of resultant derivative securities by international banks created a vast bubble in 2001–2007, leading to crisis and recession. State provision of liquidity and capital in 2008–2009 rescued the banks, while state expenditure prevented a worsening of the recession. The result in the eurozone was a sovereign debt crisis, exacerbated by the structural weaknesses of monetary union.

Subfields: Finance, Sociology and Political Science

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Citations in the corpus

Eurozone sovereign contagion: Evidence from the CDS market (2005–2010) (2012, background): “These deficits were financed from abroad primarily in the form of lending by core Eurozone banks that laid the grounds for the excessive indebtedness of periphery to the core (Lapavitsas et al., 2010a, 2010b).”
Peripheral Europe’s Debt and German Wages. The Role of Wage Policy in the Euro Area (2011, background): “…the countries of Central and Eastern Europe, are not covered in our discussion and will only be mentioned occasionally for purposes of clarification. profligacy is at root of the crisis of the Euro system (see Lapavitsas et al 2010a, 2010b for similar and Wyplosz (2010) for an opposing analysis).”