The Eurozone Debt Crisis: From its Origins to a Way Forward

Recent events in the world economy, such as the pandemic and the war in Ukraine, have special implications for the countries that are part of the most advanced integration group in the world – the European Union (EU). In order to face new challenges, the EU must constantly evolve, because leaving the structure unchanged could mean stagnation and collapse. The paper aims to assess the functioning of the European Union in the conditions of the new ‘post-pandemic’ reality and the consequences of the war in Ukraine, and to review the prospects for further integration. The paper uses a diagnostic approach that involves establishing the actual state of affairs, assessing it, and considering the possibility of its improvement. As a result of the considerations undertaken, it can be assumed that the stability (and even the survival) of the EU seem to be favoured more by integration initiatives referring to the neo-functional theory and federal approach rather than the confederal approach. It is justified to increase the role of the political spill-over effect and the assumptions of heterodox economics. Historical experience leads to the conclusion that failure to take appropriate initiatives may trigger the disintegration mechanism and, consequently, the collapse of the European integration project.

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“…21 O'Leary (2020): 17 and 38. 22 For more, see Valiante (2011);Dunin-Wąsowicz et al (2012); Kawalec (2017). 23 Bartoszewicz ( 2016): 111.…”

Section: The Prospects For the Functioning Of The European Unionmentioning

confidence: 99%

Economic integration in the face of new challenges for the European economy

Markowski

Warżała

2023

10.14746/rpeis

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“…To the extent that it shows the improvement in their competitiveness, we can conclude that it took 10-15 years to CEE for the fundamental reforms they have implemented to start producing the competitiveness dividend. It should also be noted that the analysed period is also quite dynamic, in the sense that it includes the time of the Global Financial Crisis at the end of the first decade of the current century, as well as the period of the Eurozone crisis (Valiante, 2011), which consequently had negative consequences on the economic dynamics in European countries. In addition to analysing the average trends, the evaluation of the cross-country analysis may also provide valuable insights.…”

Section: Global Competitiveness Indicatormentioning

confidence: 99%

National Competitiveness and Foreign Direct Investment in Emerging Europe

Ranđelović

Martinović

2022

Economic Themes

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The paper evaluates the relationship between the indicators of competitiveness of national economies (real unit labour costs and Global Competitiveness Index) and the flow of FDI in Central and Eastern Europe (CEE) over the last two decades. Our results show that from 2000 to 2020, CEE economies had an average annual inflow of FDI of 3.9% of GDP, with significant variation across the region. We have found out that the relationship between the net inflow of FDI and the real unit labour costs was strongly negative, while the results on the link with the Global Competitiveness Index was less conclusive. In 2020, due to pandemic global flow of FDI, shrank by around 40%, while the net inflow of FDI to CEE countries declined on average by 15%. These trends and results of survey-based analyses from other studies suggest that CEE region, and especially the Western Balkans countries, may benefit from the nearshoring process in the future. To exploit that opportunity, they may need to put focus of their policies on efficiency-enhancing tax reforms (that would reduce the unit labour costs) and other structural reforms that would result in improvement of the stock and quality of their physical and human capital.

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“…The case of Greece shows that high levels of public debt can produce anytime a selffulfilling crisis, due to multiple equilibria issues (Wyplosz, 2014). The sovereign debt crisis entailed a transformation of liquidity into solvency problems (Valiante, 2011).…”

Section: Theoretical Considerations Regarding Economic Growth and Public Debt Sustainabilitymentioning

confidence: 99%

Public Debt and Economic Growth in Euro Area Countries. A Wavelet Approach

Albu

2021

Technological and Economic Development of Economy

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In this paper we propose to analyze the dynamic of the relation between public debt and economic growth rate for Euro area countries by employing a wavelet approach, establishing thus both short-term and long-term correlations between these two variables. In this way we will present time-frequency dependencies between debt and economic growth and differentiate between short term and long-term effects. High levels of public debt have a negative impact on the economic output, because they entail concerns about debt sustainability. Non-linear analysis of the debt-growth nexus shows the existence of thresholds from which rising indebtedness can hamper economic growth. Using wavelet analysis, we demonstrate that there is a strong relation between public debt and economic growth, especially for high frequencies, public debt having a significant impact on economic growth in case of periods situated above 2 years for most Euro Zone member states. High debt levels can cause serious effects on fiscal stability and therefore require fiscal consolidation in order to restore economic growth. Therefore, Euro Zone member states should implement prudent debt policies and establish clear limits for debt increase, in order to comply with fiscal sustainability and ensure conditions for preserving economic growth.

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The Eurozone Debt Crisis: From its Origins to a Way Forward

Cited by 9 publications

References 5 publications

Economic integration in the face of new challenges for the European economy

Economic integration in the face of new challenges for the European economy

National Competitiveness and Foreign Direct Investment in Emerging Europe

Public Debt and Economic Growth in Euro Area Countries. A Wavelet Approach

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