The Electoral Impact of the 2008 Economic Crisis in Europe

Abstract

The severe economic crisis that unfolded in Western economies in 2008 could be expected to have had political consequences as well as economic ones. As European economies slipped into recession in the latter part of 2008, the focus of attention in both European Union and national politics turned increasingly to economic matters. The immediate cause of the recession was widely attributed to external shocks, particularly the financial crisis in the United States, which was precipitated by events such as the collapse of the Lehman Brothers investment bank, the bailout of the insurance conglomerate AIG, and the ripple effects throughout the economy of those events. For most European economies, the low point was reached in the second quarter of 2009, with the average net growth in gross domestic product (GDP) for the EU27 at that time registering −4.2 per cent (Table 4.1). Only Poland escaped recession conditions, showing weak growth at an annualized rate of +1.7 per cent in this period. By the first quarter of 2010, all European countries had begun at least a modest recovery from the recession. However, this recovery began to stall as a second economic crisis took shape in Europe, involving sovereign debt markets in Greece, Spain, Ireland, and some other countries, generating pressures on European banks and other institutions and even raising anxieties about the potential survival of the Euro.