• DOI:10.1146/ANNUREV-POLISCI-051215-023101
• Corpus ID: 15431111

Understanding the Political Economy of the Eurozone Crisis

@article{Frieden2016UnderstandingTP,
  title={Understanding the Political Economy of the Eurozone Crisis},
  author={Jeffry A. Frieden and Stefanie Walter},
  journal={ERN: Economic \& Political Integration (Topic)},
  year={2016}
}

• J. Frieden, Stefanie Walter
• Published 1 August 2016
• Economics
• ERN: Economic & Political Integration (Topic)

The Eurozone crisis constitutes a grave challenge to European integration. This article presents an overview of the causes of the crisis and analyzes why it has been so difficult to resolve. We focus on how responses to the crisis were shaped by distributive conflicts both among and within countries. On the international level, debtor and creditor countries have fought over the distribution of responsibility for the accumulated debt; countries with current account surpluses and deficits have fought over who should implement the policies necessary to reduce the current account imbalances. Within countries, interest groups have fought to shift the costs of crisis resolution away from themselves. The article emphasizes that the Eurozone crisis shares many features of previous debt and balance-of-payments crises. However, the Eurozone's predicament is unique because it is set within a monetary union that strongly constrains the policy options available to policy makers and vastly increases the interdependence...