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Causes and Consequences of the Recent European Crisis: Can Polanyi help us understand problems of the Eurozone?

Year 2014, Volume: 3 Issue: 2, 37 - 49, 29.08.2014
https://doi.org/10.20991/allazimuth.167326

Abstract

References

  • Beker, Victor A., “The European Debt Crisis: Causes and Consequences.” J Stock Forex Trad 3, no.2 (2014).
  • Becker J. and Jager J., “From an Economic Crisis to a Crisis of European Integration.” Paper presented at the IIPPE Conference: Neoliberalism and the Crisis of Economic Science, Istanbul, May 2011.
  • Bernanke, Ben. “The Global Saving Glut and the U.S. Current Account Deficit.” Remarks by Federal Reserve Governor Ben S. Bernanke at the Sandridge Lecture, Virginia Association of Economists, Richmond, Virginia, March 10, Accessed March 20, 2014. http://www.federalreserve.gov/boarddocs/speeches/2005/200503102/.
  • Bibow, J. “The Euro Debt Crisis and Germany’s Euro Trilemma.” Levy Economic Institute of Bard College, Working Paper No: 721 (2012).
  • Caldentey, E.P. and M. Vernengo. “The Euro Imbalances and Financial Deregulation: A Post Keynesian Interpretation of the European Debt Crisis.” Levy Economic Institute of Bard College, Working Paper No: 702 (2011).
  • Carvalho, De F.J.C. “Keynes and the Reform of Capitalist Social Order.” Journal of Post Keynesian Economics 33, no.2 (Winter 2008-2009).
  • European Commission. “20 Years of the European Single Market: 1992-2012.” Publications Office of the European Union, 2012.
  • Eurostat (2012). http://epp.eurostat.ec.europa.eu/portal/page/portal/product_details/publication
  • Feldstein, M. “The Euro and European Economic Condition.” NBER Working Paper Series, Working Paper No: (2011).
  • Fernandes, A. L. C. and P. R. Mota. “The Roots of the Eurozone Sovereign Debt Crisis: PIGS vs. Non-PIGS.” Panoeconomicus 5 (2011): 631-649.
  • Fernandes, A. L. C. and P. R. Mota. “The Eurozone Peripheral Countries’ Sovereign Debt Crisis: Also a Case of Non-Mature Democracies?” Panoeconomicus 60, no.3 (2013).
  • Johnson, Simon “The End of Euro Is Not About Austerity.” New York Times, June 21, 2012. Accessed on June 28,
  • Kapner, Suzanne. “Study Finds Endemic European Housing Bubble.” Financial Times, February 14, 2011.
  • Krugman, Paul. “Currency Regimes, Capital Flows, and Crises”. Paper presented at the 14th Annual Jacques Polak Research Conference, hosted by the IMF, Washington, DC-November 7-8, 2013.
  • Krugman, Paul. “Eurozone Problems.” New York Times, January 30, 2012.
  • Mundell, R.A.”A Theory of Optimum Currency Areas.” Amarican Economic Review 52, no.4 (1961).
  • Örmeci, Ozan. “Karl Polanyi and The Great Transformation.” Uşak University Journal of Social Sciences 4, no.1 (2011).
  • Özgür, Gökçer, and Hüseyin Özel. “Double Movement, Globalization and The Crisis.” American Journal of Economics and Sociology 72, no.4 (October, 2013).
  • Persson, K.Gunnar. An Economic History of Europe, Knowledge, Institutions and Growth, 600 to the Present. Cambridge: Cambridge University Press, 2010.
  • Phelps, S.E. “Capitalism and Keynes: From the Treatise on Probability to the General Theory.” Paper presented at the Conference Commemorating Keynes 1883-1943, Palazzo Mundell, Santa Colomba (Siena), 4-6 July 2006.
  • Polanyi, Karl. The Great Transformation: The Political and Economic Origins of Our Time. Boston, MA: Beacon Press, 1944.
  • Rodrik, Dani. “Rethinking Democracy.” Project Syndicate, June 11, 2014.
  • Stanley, Tim. “European Fascism Has Returned?” The Telegraph, June 30, 2014.
  • Von Hagen, J. and Wolff G. B. “What Do Deficits Tell Us About Debt? Empirical Evidence on Creative Accounting with Fiscal Rules in the EU.” Journal of Banking and Finance 30, no.12 (December 2006). Appendix of Tables
  • Table 1- Current Account Balance in Selected Eurozone Countries France ,8 ,2 ,7 ,5 0,5 0,6 1 1,7 1,5 1,7 Germany ,9 ,7 ,1 ,3 ,5 ,3 ,6 ,7 Netherlands ,6 ,6 ,5 ,6 ,4 ,3 ,7 ,3 ,2 ,6 Finland ,4 ,5 ,8 ,2 ,4 ,2 ,3 ,6 ,8 ,4 Greece 7,2 6,5 6,5 5,8 7,6 11,4 14,6 14,9 11,1 10,1 Italy ,3 0,4 0,8 0,3 0,9 1,5 1,3 2,9 2 3,5 Portugal 10,3 8,2 6,4 8,3 10,3 10,7 10,1 12,6 10,9 10 Spain 3,9 3,3 3,5 5,2 7,4 9 10 9,6 5,2 4,6 Source: Eurostat yearbook 2012
  • Table 2- Interest Rate Convergence and Decrease before and during the Crisis for Selected Countries Germany 78 07 04 35 76 22 22 61 France 86 13 10 41 80 30 23 65 12 32 Netherlands 89 12 10 37 78 29 23 69 99 99 Finland 98 13 11 35 78 29 29 74 01 01 Ireland 01 13 08 33 76 31 53 23 74 60 Greece 12 27 26 59 07 50 80 17 09 75 Italy 03 25 26 56 05 49 68 31 04 42 Spain 96 12 10 39 78 31 37 98 25 44 Portugal 01 18 14 44 91 42 52 21 40 24 UK 91 58 93 46 37 06 50 36 36 87 Source: Eurostat yearbook 2012
  • Table 3- Eurozone Annual Unemployment Rates (in percentages) 2007 2009 Germany 6 6 7 1 1 9 France 3 7 8 6 3 Netherlands 5 3 4 5 4 8 Austria 6 6 3 4 2 3 Ireland 9 5 1 7 5 3 Greece 7 6 6 6 7 9 Spain 3 8 7 1 1 Portugal 6 7 6 7 5 Italy 1 6 3 4 1 2 Core Countries 7 1 3 8 3 3 Non-core 7 Countries 9 8 4 4 6
  • Source: Caldentey and Vernengo, “The Euro Imbalances.”

Causes and Consequences of the Recent European Crisis: Can Polanyi help us understand problems of the Eurozone?

Year 2014, Volume: 3 Issue: 2, 37 - 49, 29.08.2014
https://doi.org/10.20991/allazimuth.167326

Abstract

By evoking economic turmoil in Europe, the global crisis of 2007-2008 had important impacts on the economic and political integration of the European Union (EU), leading to a reassessment of the relationship between the core– periphery countries and the model of the ‘democratic European welfare state.’ Most studies that address this problem in the EU focus on the fiscal mismanagement and welfare policies of the non-core or periphery countries (i.e. Greece) as the main culprit. Unlike the mainstream ideas, this paper explains the recent European crisis as a result of the liberalization and deregulation process that started with the second globalization wave in the 1970s. This paper also questions whether the recent radical nationalist trend in the EU countries can be explained as a byproduct of the crisis, using Polanyi’s notion of “double movement”.

References

  • Beker, Victor A., “The European Debt Crisis: Causes and Consequences.” J Stock Forex Trad 3, no.2 (2014).
  • Becker J. and Jager J., “From an Economic Crisis to a Crisis of European Integration.” Paper presented at the IIPPE Conference: Neoliberalism and the Crisis of Economic Science, Istanbul, May 2011.
  • Bernanke, Ben. “The Global Saving Glut and the U.S. Current Account Deficit.” Remarks by Federal Reserve Governor Ben S. Bernanke at the Sandridge Lecture, Virginia Association of Economists, Richmond, Virginia, March 10, Accessed March 20, 2014. http://www.federalreserve.gov/boarddocs/speeches/2005/200503102/.
  • Bibow, J. “The Euro Debt Crisis and Germany’s Euro Trilemma.” Levy Economic Institute of Bard College, Working Paper No: 721 (2012).
  • Caldentey, E.P. and M. Vernengo. “The Euro Imbalances and Financial Deregulation: A Post Keynesian Interpretation of the European Debt Crisis.” Levy Economic Institute of Bard College, Working Paper No: 702 (2011).
  • Carvalho, De F.J.C. “Keynes and the Reform of Capitalist Social Order.” Journal of Post Keynesian Economics 33, no.2 (Winter 2008-2009).
  • European Commission. “20 Years of the European Single Market: 1992-2012.” Publications Office of the European Union, 2012.
  • Eurostat (2012). http://epp.eurostat.ec.europa.eu/portal/page/portal/product_details/publication
  • Feldstein, M. “The Euro and European Economic Condition.” NBER Working Paper Series, Working Paper No: (2011).
  • Fernandes, A. L. C. and P. R. Mota. “The Roots of the Eurozone Sovereign Debt Crisis: PIGS vs. Non-PIGS.” Panoeconomicus 5 (2011): 631-649.
  • Fernandes, A. L. C. and P. R. Mota. “The Eurozone Peripheral Countries’ Sovereign Debt Crisis: Also a Case of Non-Mature Democracies?” Panoeconomicus 60, no.3 (2013).
  • Johnson, Simon “The End of Euro Is Not About Austerity.” New York Times, June 21, 2012. Accessed on June 28,
  • Kapner, Suzanne. “Study Finds Endemic European Housing Bubble.” Financial Times, February 14, 2011.
  • Krugman, Paul. “Currency Regimes, Capital Flows, and Crises”. Paper presented at the 14th Annual Jacques Polak Research Conference, hosted by the IMF, Washington, DC-November 7-8, 2013.
  • Krugman, Paul. “Eurozone Problems.” New York Times, January 30, 2012.
  • Mundell, R.A.”A Theory of Optimum Currency Areas.” Amarican Economic Review 52, no.4 (1961).
  • Örmeci, Ozan. “Karl Polanyi and The Great Transformation.” Uşak University Journal of Social Sciences 4, no.1 (2011).
  • Özgür, Gökçer, and Hüseyin Özel. “Double Movement, Globalization and The Crisis.” American Journal of Economics and Sociology 72, no.4 (October, 2013).
  • Persson, K.Gunnar. An Economic History of Europe, Knowledge, Institutions and Growth, 600 to the Present. Cambridge: Cambridge University Press, 2010.
  • Phelps, S.E. “Capitalism and Keynes: From the Treatise on Probability to the General Theory.” Paper presented at the Conference Commemorating Keynes 1883-1943, Palazzo Mundell, Santa Colomba (Siena), 4-6 July 2006.
  • Polanyi, Karl. The Great Transformation: The Political and Economic Origins of Our Time. Boston, MA: Beacon Press, 1944.
  • Rodrik, Dani. “Rethinking Democracy.” Project Syndicate, June 11, 2014.
  • Stanley, Tim. “European Fascism Has Returned?” The Telegraph, June 30, 2014.
  • Von Hagen, J. and Wolff G. B. “What Do Deficits Tell Us About Debt? Empirical Evidence on Creative Accounting with Fiscal Rules in the EU.” Journal of Banking and Finance 30, no.12 (December 2006). Appendix of Tables
  • Table 1- Current Account Balance in Selected Eurozone Countries France ,8 ,2 ,7 ,5 0,5 0,6 1 1,7 1,5 1,7 Germany ,9 ,7 ,1 ,3 ,5 ,3 ,6 ,7 Netherlands ,6 ,6 ,5 ,6 ,4 ,3 ,7 ,3 ,2 ,6 Finland ,4 ,5 ,8 ,2 ,4 ,2 ,3 ,6 ,8 ,4 Greece 7,2 6,5 6,5 5,8 7,6 11,4 14,6 14,9 11,1 10,1 Italy ,3 0,4 0,8 0,3 0,9 1,5 1,3 2,9 2 3,5 Portugal 10,3 8,2 6,4 8,3 10,3 10,7 10,1 12,6 10,9 10 Spain 3,9 3,3 3,5 5,2 7,4 9 10 9,6 5,2 4,6 Source: Eurostat yearbook 2012
  • Table 2- Interest Rate Convergence and Decrease before and during the Crisis for Selected Countries Germany 78 07 04 35 76 22 22 61 France 86 13 10 41 80 30 23 65 12 32 Netherlands 89 12 10 37 78 29 23 69 99 99 Finland 98 13 11 35 78 29 29 74 01 01 Ireland 01 13 08 33 76 31 53 23 74 60 Greece 12 27 26 59 07 50 80 17 09 75 Italy 03 25 26 56 05 49 68 31 04 42 Spain 96 12 10 39 78 31 37 98 25 44 Portugal 01 18 14 44 91 42 52 21 40 24 UK 91 58 93 46 37 06 50 36 36 87 Source: Eurostat yearbook 2012
  • Table 3- Eurozone Annual Unemployment Rates (in percentages) 2007 2009 Germany 6 6 7 1 1 9 France 3 7 8 6 3 Netherlands 5 3 4 5 4 8 Austria 6 6 3 4 2 3 Ireland 9 5 1 7 5 3 Greece 7 6 6 6 7 9 Spain 3 8 7 1 1 Portugal 6 7 6 7 5 Italy 1 6 3 4 1 2 Core Countries 7 1 3 8 3 3 Non-core 7 Countries 9 8 4 4 6
  • Source: Caldentey and Vernengo, “The Euro Imbalances.”
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Primary Language English
Journal Section Articles
Authors

Mine Kara This is me

Publication Date August 29, 2014
Published in Issue Year 2014 Volume: 3 Issue: 2

Cite

Chicago Kara, Mine. “Causes and Consequences of the Recent European Crisis: Can Polanyi Help Us Understand Problems of the Eurozone?”. All Azimuth: A Journal of Foreign Policy and Peace 3, no. 2 (August 2014): 37-49. https://doi.org/10.20991/allazimuth.167326.

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