The Euro crisis : a study of the financial upheavals and the solutions applied in selected Mediterranean states

Abstract

This thesis is concerned with the developments of the financial and economic crises which from 2009 onwards have impaired the Eurozone as a whole. The analysis begins with a historical overview of the EMU and describes how it was formulated. More explicitly, the thesis discusses the institutional problems such as a lack of fiscal integration, too much flexibility, poor monitoring and enforcement mechanisms emphasizing their crucial bearing in the crisis. The dissertation proceeds with a case study of three countries: Greece, Spain, and Malta. On the one hand, the causes and effects in Greece and Spain are analyzed. A stark difference emerges between Greece, engaged in corruption and rampant expenditure, and Spain which struggled with a shrinking economy. On the other hand, the study suggests that although there were different reasons in these two states, the structure of the Euro did play a role in intensifying the crisis. Although the study concentrates on two states, it does not ignore the fact that more countries have fallen victims to the Euro Crisis. It is noteworthy how these are located on the periphery of the EU and the dissertation attempts to outline the pattern behind this perplexity. Meanwhile, there is also a chapter on Malta which presents an interesting contrast to Spain and Greece as one of those few states in the Mediterranean where the impact of the crisis was minor. This part also explores the causes of the crisis, but more than this it brings out the success that the measures adopted at a national level had in limiting its effects. Last but not least, there is an evaluation of the solutions which have been applied at EU level and whether these are satisfactory or not.