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Crisis in the Euro Zone

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An Assessment of the Global Impact of the Financial Crisis

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Abstract

At the outbreak of the current financial crisis many European commentators and politicians took it to be an essentially Anglo-Saxon affair. The euro zone was taken to be, in effect, a victim of ‘collateral damage’ from the fallout of a crisis manufactured elsewhere. The financial systems of core euro-zone countries were held to be fundamentally different from Anglo-Saxon ones and thereby less vulnerable to systemic risks, although there had been a shift towards more capital market-based financial systems amongst European economies. The core euro-zone countries had not seen house price booms on US or UK levels and associated consumption growth; with greater provision of social housing there was not the same expansion of subprime lending. Nor had European countries run major external deficits — overall the euro zone was in approximate balance, with Germany running a clear surplus, and most of the member countries’ trade was conducted with each other. Indeed, the European Commission (2009, p. 48) recently asserted that ‘Overall, the role of the euro area in global imbalances was negligible until the crisis broke’, rather overlooking the role of Germany’s large current account surplus.

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Authors
  1. Jonathan Perraton
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Editor information

Editors and Affiliations

  1. Cambridge Centre for Economics and Public Policy, Department of Land Economy, University of Cambridge, UK

    Philip Arestis (Professor of Economics, Distinguished Adjunct Professor of Economics, Senior Scholar, Visiting Professor, Professorial Research Associate, British Hispanic Foundation ‘Queen Victoria Eugenia’ British Hispanic Chair of Doctoral Studies, Chief Academic Adviser) (Professor of Economics, Distinguished Adjunct Professor of Economics, Senior Scholar, Visiting Professor, Professorial Research Associate, British Hispanic Foundation ‘Queen Victoria Eugenia’ British Hispanic Chair of Doctoral Studies, Chief Academic Adviser)

  2. Department of Applied Economics V, Universidad del País Vasco, Spain

    Philip Arestis (Professor of Economics, Distinguished Adjunct Professor of Economics, Senior Scholar, Visiting Professor, Professorial Research Associate, British Hispanic Foundation ‘Queen Victoria Eugenia’ British Hispanic Chair of Doctoral Studies, Chief Academic Adviser) (Professor of Economics, Distinguished Adjunct Professor of Economics, Senior Scholar, Visiting Professor, Professorial Research Associate, British Hispanic Foundation ‘Queen Victoria Eugenia’ British Hispanic Chair of Doctoral Studies, Chief Academic Adviser)

  3. Department of Economics, University of Utah, USA

    Philip Arestis (Professor of Economics, Distinguished Adjunct Professor of Economics, Senior Scholar, Visiting Professor, Professorial Research Associate, British Hispanic Foundation ‘Queen Victoria Eugenia’ British Hispanic Chair of Doctoral Studies, Chief Academic Adviser) (Professor of Economics, Distinguished Adjunct Professor of Economics, Senior Scholar, Visiting Professor, Professorial Research Associate, British Hispanic Foundation ‘Queen Victoria Eugenia’ British Hispanic Chair of Doctoral Studies, Chief Academic Adviser)

  4. Levy Economics Institute, New York, USA

    Philip Arestis (Professor of Economics, Distinguished Adjunct Professor of Economics, Senior Scholar, Visiting Professor, Professorial Research Associate, British Hispanic Foundation ‘Queen Victoria Eugenia’ British Hispanic Chair of Doctoral Studies, Chief Academic Adviser) (Professor of Economics, Distinguished Adjunct Professor of Economics, Senior Scholar, Visiting Professor, Professorial Research Associate, British Hispanic Foundation ‘Queen Victoria Eugenia’ British Hispanic Chair of Doctoral Studies, Chief Academic Adviser)

  5. Leeds Business School, University of Leeds, UK

    Philip Arestis (Professor of Economics, Distinguished Adjunct Professor of Economics, Senior Scholar, Visiting Professor, Professorial Research Associate, British Hispanic Foundation ‘Queen Victoria Eugenia’ British Hispanic Chair of Doctoral Studies, Chief Academic Adviser) (Professor of Economics, Distinguished Adjunct Professor of Economics, Senior Scholar, Visiting Professor, Professorial Research Associate, British Hispanic Foundation ‘Queen Victoria Eugenia’ British Hispanic Chair of Doctoral Studies, Chief Academic Adviser)

  6. Department of Finance and Management Studies, School of Oriental and African Studies (SOAS), University of London, UK

    Philip Arestis (Professor of Economics, Distinguished Adjunct Professor of Economics, Senior Scholar, Visiting Professor, Professorial Research Associate, British Hispanic Foundation ‘Queen Victoria Eugenia’ British Hispanic Chair of Doctoral Studies, Chief Academic Adviser) (Professor of Economics, Distinguished Adjunct Professor of Economics, Senior Scholar, Visiting Professor, Professorial Research Associate, British Hispanic Foundation ‘Queen Victoria Eugenia’ British Hispanic Chair of Doctoral Studies, Chief Academic Adviser)

  7. UK Government Economic Service (GES) on Professional Developments in Economics, UK

    Philip Arestis (Professor of Economics, Distinguished Adjunct Professor of Economics, Senior Scholar, Visiting Professor, Professorial Research Associate, British Hispanic Foundation ‘Queen Victoria Eugenia’ British Hispanic Chair of Doctoral Studies, Chief Academic Adviser) (Professor of Economics, Distinguished Adjunct Professor of Economics, Senior Scholar, Visiting Professor, Professorial Research Associate, British Hispanic Foundation ‘Queen Victoria Eugenia’ British Hispanic Chair of Doctoral Studies, Chief Academic Adviser)

  8. Brazilian School of Public and Business Administration, Getulio Vargas Foundation, Brazil

    Rogério Sobreira (Associate Professor of Economics and Finance, CNPq Researcher) (Associate Professor of Economics and Finance, CNPq Researcher)

  9. University of Brasilia (UnB), Brazil

    José Luis Oreiro (Associate Professor of Economics, Level I Researcher, Director, Member of the Editorial Board of the Brazilian Journal of Political Economy (REP) (Associate Professor of Economics, Level I Researcher, Director, Member of the Editorial Board of the Brazilian Journal of Political Economy (REP)

  10. National Scientific Council (CNPq/Brazil), Brazil

    José Luis Oreiro (Associate Professor of Economics, Level I Researcher, Director, Member of the Editorial Board of the Brazilian Journal of Political Economy (REP) (Associate Professor of Economics, Level I Researcher, Director, Member of the Editorial Board of the Brazilian Journal of Political Economy (REP)

  11. Brazilian Keynesian Association (AKB), Brazil

    José Luis Oreiro (Associate Professor of Economics, Level I Researcher, Director, Member of the Editorial Board of the Brazilian Journal of Political Economy (REP) (Associate Professor of Economics, Level I Researcher, Director, Member of the Editorial Board of the Brazilian Journal of Political Economy (REP)

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© 2011 Jonathan Perraton

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Perraton, J. (2011). Crisis in the Euro Zone. In: Arestis, P., Sobreira, R., Oreiro, J.L. (eds) An Assessment of the Global Impact of the Financial Crisis. Palgrave Macmillan, London. https://doi.org/10.1057/9780230306912_5

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