The Endogenous Fragility at European Periphery

A Theoretical Interpretation
  • Nikolay Nenovsky
  • Momtchil Karpouzanov


The current crisis has revealed the co-existence of at least two quite heterogeneous parts of Europe lying hidden behind the unifying and homogenising veil of the European Union membership status. The main hypothesis exposed here is that this stylised division of the EU is largely endogenous and internal to the integration processes themselves. Given the genesis and the designed functioning of the European Union and the Euro-zone a set of centrifugal processes come into play inevitably leading to disintegration. Broadly speaking, the self-propelled breakdown processes come through the creation of “an illusory impression” of safety net and risk insurance in both sub-sets of the EU. This not only increases the overall level of risk and vulnerability but also leads to unfavourable risk redistribution directing it to the weaker links in the whole EU structure. The economic system then becomes much more vulnerable to not only external shocks but also to internal ones. This of course is usually accompanied by loss of discipline and the emergence of various forms of non-market and bandit behaviour in both core and periphery.


Current Account Real Interest Rate European Central Bank European Project Foreign Reserve 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


  1. Aimable B (2005) Les cinq capitalismes. Diversité des systèmes économiques et sociaux dans la mondialisation. Seuil, ParisGoogle Scholar
  2. Arendt H (2002 [1948]) L’impérialisme. Les origines du totalitarisme, Fayard, ParisGoogle Scholar
  3. Batou J (2000) Les inégalités. Une ou deux Europes? Revue économique 51:323–334Google Scholar
  4. Bonnet G (1933) The economic reconstruction of Central and South-Eastern Europe. Int Aff 12:19–36Google Scholar
  5. Csaba L (2007) The new political economy of emerging Europe. AkadémiaiKiadó/Kluwer, BudapestGoogle Scholar
  6. De Grauwe P (2011) The governance of a fragile Eurozone. CEPS working document 347Google Scholar
  7. Delaisi F (1929) Les deux Europes. Payot, ParisGoogle Scholar
  8. Dietrich D, Knedlik T, Lindner A et al (2011) Central and Eastern European countries in the global financial crisis: typical twin crisis? Post Commun Econ 23:415–432CrossRefGoogle Scholar
  9. Dooley M (2000) A model of crises in emerging markets. Econ J 110:256–272CrossRefGoogle Scholar
  10. Dowd K, Hutchinson M, Kerr G et al (2011) The coming Fiat money cataclysm – and after. In: 29th Cato institute annual monetary conference, New York, 16 Nov 2011Google Scholar
  11. ECB (2012) Competitiveness and external imbalances within the Euro area. ECB occasional paper 139Google Scholar
  12. Einzig P (1941) Hitler’s “New order” in theory and practice. Econ J 51(201):1–18CrossRefGoogle Scholar
  13. Farkas B (2011) The Central and Eastern European model of capitalism. Post Commun Econ 23:15–34CrossRefGoogle Scholar
  14. Fisher A (1939) The German trade drive in Southeastern Europe. Int Aff 18:143–170Google Scholar
  15. Garrison R (2001) Time and money. The macroeconomics of capital structure. Routledge, London/New YorkGoogle Scholar
  16. Gros D, Alcidi C et al (2011) Adjustment difficulties and debt overhangs in the eurozone periphery. CEPS working document 347Google Scholar
  17. Guillebaud C (1940) Hitler’s new economic order for Europe. Econ J 50:449–460CrossRefGoogle Scholar
  18. Haberler G (1946 [1937]) Prosperity and depression. A theoretical analysis of cyclical movements. United Nations, Lake SuccessGoogle Scholar
  19. Ialnazov D, Nenovsky N (2011) A game theory interpretation of the post-communist evolution. J Econ Issues 45:41–55CrossRefGoogle Scholar
  20. Luengnaruemitchai P, Schadler S et al (2007) Do economists and financial markets perspectives on the new members of the EU differ? IMF working paper 7:65Google Scholar
  21. Mongelli F (2013) The mutating euro area crisis. Is the balance between “sceptics” and “advocates” shifting? ECB occasional paper 144Google Scholar
  22. Natixis (2011) La crise de la zone euro est finalement facile à comprendre. NATIXIS FlacheEconomie 835Google Scholar
  23. Nenovsky N (2010) EU enlargement and monetary regimes from the insurance model perspective. The William Davidson Institute working paper 997Google Scholar
  24. Nenovsky N (2012) Theoretical debates in Bulgaria during the Great Depression. Confronting Sombart, Marx and Keynes. Oeconomia Hist Methodol Philos 2:67–101Google Scholar
  25. Nenovsky N, Villieu P (2011) EU enlargement and monetary regimes from the insurance model perspective. Post Commun Econ 23:433–447CrossRefGoogle Scholar
  26. Nenovsky N, Tochkov K, Turcu C (2013) Monetary regime and EU accession: comparing Bulgaria and Romania. Commun Post Commun Stud 46:13–23Google Scholar
  27. Polishchuk L (2008) Misuse of institutions: patterns and causes. Journal Comp Econ Stud 4:57–80Google Scholar
  28. Röpke W (1942) International economic disintegration. William Hodge, LondonGoogle Scholar
  29. Rugraff E (2010) Strengths and weaknesses of the outward FDI paths of the central European countries. Post Commun Econ 22:1–17CrossRefGoogle Scholar
  30. Slim A (1997) Intégrations, désintégrations et réintégrations en Europe de l’Est: les théoriestraditionnelles remises en question. Revue d’Etudes Comparatives Est-Ouest 4:5–83CrossRefGoogle Scholar
  31. Vincent A (2011) Capital flows and development in CEECs. BNB Paribas Conjuncture, Paris, 17–26 Oct 2011Google Scholar
  32. Yakovlev A, Simachev Y, Danilov Y et al (2010) The Russian corporation: patterns of behaviour during the crisis. Post Commun Econ 22:129–140CrossRefGoogle Scholar

Copyright information

© Springer International Publishing Switzerland 2013

Authors and Affiliations

  1. 1.CRIISEA, Université de Picardie Jules VerneAmiensFrance
  2. 2.University of National and World EconomySofiaBulgaria
  3. 3.European University of LefkeNicosiaCyprus

Personalised recommendations