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Corresponding Author:
George Zestos, Department of Economics, Christopher Newport University, Newport News, USA

Coauthors:
Morgan H. Simmons, Department of Economics, Christopher Newport University, Newport News, USA

Why a Eurozone Collapse should not be a Surprise: The Role of Germany and Greece

Volume 71 - Issue 3, August 2018
(pp. 227-256)
JEL classification: F15, F34, F36, F45
Keywords: Eurocrisis, European Sovereign Debt Crisis, Monetary Policy, Fiscal Policy, Austerity, Eurozone Breakup

Abstract

The US subprime mortgage crisis of 2007-2009 spread to Europe, where it morphed into the Eurocrisis, or the European Sovereign Debt Crisis. Total recovery from the Eurocrisis is still not imminent, and a collapse of the Eurozone and even the EU is possible. Austerity is widely accepted as a major reason for prolonging the financial crisis in the Eurozone. Such austerity was primarily imposed on the Eurozone members by Germany and its northern allies. In addition to the financial crisis, a geopolitical crisis has also emerged. Much dissent towards the handling of both of these crises exists in the EU, leading to a rise of Euroscepticism, nationalism, and anti-EU populist political parties. This paper explores how different scenarios could evolve into the breakup of the EMU or a possible recovery from the Eurocrisis.


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Institute for International Economics
of the Genoa Chamber of Commerce


Istituto di Economia Internazionale
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