The European crisis: Analysis of the macroeconomic imbalances in the rescued euro area countries

Information
Title: The European crisis: Analysis of the macroeconomic imbalances in the rescued euro area countries
Issue: Vol. 12, No 2, 2019
Published date: 05-2019 (print) / 05-2019 (online)
Journal: Journal of International Studies
ISSN: 2071-8330, eISSN: 2306-3483
Authors: Leonida Correia
Macroeconomic imbalances are considered as one of the most important causes of European crisis. The crisis has significantly aggravated these imbalances, and some euro area countries – Greece, Ireland, Portugal, Spain and Cyprus – have had to request econ
Keywords: Macroeconomic imbalances, financial assistance, European crisis, rescued countries
DOI: 10.14254/2071-8330.2019/12-2/2
DOAJ: https://doaj.org/article/d4707875adce4df4bcb253ce42b0c5d0
Language: English
Pages: 22-45 (24)
JEL classification: E62, E65, F15, F45
Website: https://www.jois.eu/?511,en_the-european-crisis-analysis-of-the-macroeconomic-imbalances-in-the-rescued-euro-area-countries
File https://www.jois.eu/files/2_617_Correia_Martins.pdf
Licenses:
This article had the support of Centre for Transdisciplinary Development Studies (CETRAD) which is supported by national funds, through the FCT – Portuguese Foundation for Science and Technology under the project UID/SOC/04011/2019.
Abstract

Macroeconomic imbalances are considered as one of the most important causes of European crisis. The crisis has significantly aggravated these imbalances, and some euro area countries – Greece, Ireland, Portugal, Spain and Cyprus – have had to request economic and/or financial assistance. Using the scoreboard of headline indicators of the Macroeconomic Imbalance Procedure as reference and applying statistical analysis methods, this paper provides new evidence on the role played by the assistance programmes in these five rescued countries and analyses their patterns of divergence/convergence relative to the euro area aggregate since 2007. The evidence indicates that the values of the net international investment position, private and public debt and the unemployment rates have diverged considerably from the thresholds and the euro area averages. A decade after the start of European crisis, although the economic situation has improved, the effects of the crisis and of the austerity policies continue to be felt and the macroeconomic imbalances persist in the rescued countries.

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