When in 2010 the sovereign debt crisis in the Eurozone spread from Greece to other countries, European leaders responded by demanding austerity in stressed countries -those increasingly unable to service their debt -as a condition for financial support. Alongside Ireland, South European governments were forced or pressed by the EU-ECB-IMF Troika to impose heavily pro-cyclical fiscal consolidation measures, either formally (by signing Memoranda of Understanding) or through implicit conditionality exercised by the ECB. This response was premised on the assumption that the Eurozone's debtor states could successfully pursue a strategy of internal devaluation to rectify external imbalances and eventually grow out of debt. The insistence that anything else -for instance, a combination of internal devaluation in the South and internal revaluation in the North -was unacceptable reflected the bias in favour of export-led growth that underpinned the design of the Eurozone (Matthijs 2016). Austerity fitted this strategy not only because it placed the burden of imbalances in the Eurozone on debtors alone, but also because it repressed domestic demand and depressed wages in these countries. The EU's demand of pro-cyclical fiscal consolidation at the height of a world financial crisis has been widely criticized for deepening and prolonging the post-2008 economic crisis in the Eurozone's periphery (Frankel et al. 2013; Blyth 2013; Sandbu 2015; Hopkin 2015). The IMF (2012) and the OECD (2014) later admitted that the negative effects of austerity on economic activity in debtor states were much larger than had been expected.Fiscal consolidation is not of course the only determinant of recent economic performance in 2 Southern Europe. In Portugal, for instance, the negative shock to domestic demand was mitigated by a considerable rise in exports. By contrast, in Greece, the poor performance of exports revealed further structural flaws in the country's growth model (Matsaganis 2017).To fully understand the consequences of pro-cyclical fiscal consolidation in the Eurozone periphery, however, we must also consider its impact on the income distribution.Distributional outcomes are of critical interest in and of themselves, for both social and political reasons. But recent studies also suggest that rising inequality negatively affects longterm growth (Berg et al. 2012; Cingano 2014; Ostry et al. 2014), raising doubts about the viability of austerity and internal devaluation (Stockhammer 2015; Onaran and Obst 2016). This article explores the distributional impact of austerity in the Eurozone's periphery. Our analysis of the experiences of Southern Europe shows that fiscal consolidation policies can be designed in ways that modulate their first-order effects on inequality. However, even where the burden of austerity was allocated more progressively (i.e. hurting the rich more than the poor), the income distribution was compressed downward, simultaneously raising levels of poverty and deprivation. The direct (or first order) effects of man...

During the early 2010s, creditor states and EU institutions demanded that the Southern states of the eurozone liberalize their labour markets to facilitate internal devaluation and export-led recoveries. With some variation, the Greek, Portuguese, Spanish and Italian governments responded complied. This article explains why such a strategy of internal devaluation within the eurozone might fail to produce adequate employment growth to put these countries on stable financial footing. It exploits variation in the timing and intensity of reforms to evaluate the record of the internal devaluation strategy. Our findings suggest that there is no linear relationship between internal devaluation and export-growth.Even where the latter has been impressive, dualism persists and the employment recovery has been weak. AcknowledgementsEarlier versions of this paper were presented at conferences and seminars in Florence, Lake Como, Boston, Groningen, and Madrid. The authors would like to thank participants for their comments, and are particularly indebted to Alexandre Afonso and David Luque Balbona. Detailed suggestions from two anonymous referees are gratefully acknowledged.

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This article considers the impact of international capital mobility on the character of corporate finance and corporate governance in four European countries (Germany, France, Spain, and Italy). We take issue with the widespread view that the growth of international financial markets and the lifting of capital controls will in themselves produce convergence in national systems of corporate finance and governance. Although we find evidence of convergence in specific aspects of financial regulation (e.g., the abandonment of selective credit regulation and the dismantling of barriers to universal banking), these regulatory changes have not produced any clear convergence toward either the Anglo-Saxon model of corporate finance and governance predicted in much of the literature or the alternative German bank-based model. The reasons for this, we suggest, have much to do with the way in which the politics of financial reform are likely to differ from those postulated in market-driven models of regulatory change and the fact that countries are susceptible to international pressures in different ways.This article considers the impact of financial integration on the character of corporate finance and corporate governance in four European countries (Germany, France, Spain, and Italy). Contrary to the widespread view that the growth of international financial markets and the lifting of capital controls will produce convergence in national systems of corporate finance and governance, we find that increased cross-border capital mobility since the mid-1980s has not led to such an outcome. Although we find evidence of convergence in specific aspects of financial regulation (e.g., the abandonment of selective credit regulation and the dismantling of barriers to universal banking), these regulatory changes have not produced any clear movement toward equity-centered systems of corporate finance or toward an "outsider" model of corporate governance. Corporate governance in all four countries continues to grant a dominant role to bank-mediated forms of finance and to corporate control by "insiders." Indeed, in those cases where old patterns of "insider" control have been disrupted by changes in financial regulation (as in the case of privatizations), new mechanisms to prevent an

With the recovery of growth among some Southern states, the crisis of the Eurozone may appear to be coming to an end almost a decade after the start of the great world financial crisis. There are, nonetheless, two ways in which this crisis continues to be of central importance for political economists. First, even with the recovery, the Eurozone remains divided between a small group of creditor states (principally Germany and the Benelux states), and those countries (mostly Southern states) that still have weak financial positions (either public or private) and remain vulnerable in international financial markets. The Eurozone crisis also still matters for the lessons that are drawn from it. Accounts of why large current account and debt imbalances first emerged in the Eurozone, and in some cases persist, inform how reforms-both in the Eurozone's debtor states and of the Eurozone's governance itself-are understood and evaluated. They also continue to frame how those reforms are framed for domestic audiences This article considers two competing types of explanation for the emergence of Eurozone imbalances and evaluates how persuasive they are. The first type, which has been advanced particularly forcefully by political scientist, in particular comparative political economy scholars, emphasizes differences in national institutions, in particular wage bargaining institutions. The second view, which has become dominant among economists (at least outside of Europe), emphasizes the uneven macroeconomic impact that monetary union