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A Tale of Two Crises: The Euro Area in 2008/09 and in 2010

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Abstract

One puzzle that the crises of the past three years have thrown up is why the financial crisis of the period 2008–09 and the sovereign debt crisis of 2010 had such a different political-institutional fall-out on the Euro area. In both, governments were essentially trying to avert a banking collapse. The Euro area passed the stress test of the financial crisis in the period 2008–09 surprisingly well, especially when compared with the US. By contrast, the turmoil in peripheral countries’ bond markets since late 2009 required the suspension of constitutive principles of economic governance and was a disaster for European political integration. This paper tries to offer an explanation.

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Notes

  1. A version of this paper was first presented at the workshop ‘Euro crisis’ at the Bremen International Graduate School of Social Science (BIGSSS) at the University of Bremen. Comments from seminar participants are gratefully acknowledged.

  2. The crisis may have driven home the message that we understand too little in this regard. In 2009, the Nobel Prize in economics was awarded to two scholars, Elinor Ostrom and Oliver Williamson, for their (independent) work on economic governance – http://nobelprize.org/nobel_prizes/economics/laureates/2009/ecoadv09.pdf.

  3. 4. This section is based on Mabbett and Schelkle (2010) and Schelkle and Mabbett (2010).

References

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  • Schelkle, W. (2010) ‘Good governance in crisis or a good crisis for governance? A comparison of the EU and the US’, LEQS working paper, London School of Economics, http://www2.lse.ac.uk/europeanInstitute/LEQS/LEQSPaper16.pdf, shorter version forthcoming in Review of International Political Economy.

  • Schelkle, W. and Mabbett, D. (2010) ‘The Van Rompuy reforms: Type 1 and Type 2 errors and one small bright spot’, Intereconomics 45 (December): 350–353.

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Authors and Affiliations

  1. European Institute, London School of Economics and Political Science, Houghton Street, London, WC2A 2AE, UK

    Waltraud Schelkle

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  1. Waltraud Schelkle
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Schelkle, W. A Tale of Two Crises: The Euro Area in 2008/09 and in 2010. Eur Polit Sci 10, 375–383 (2011). https://doi.org/10.1057/eps.2011.23

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  • DOI: https://doi.org/10.1057/eps.2011.23

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