This thesis can be divided thematically into three major areas, to ultimately answer the questions of how the European debt crisis came to be, what weaknesses within the EMU led to this, and what lessons can be drawn from it all. First, the developments of the EMU from its inception up to the financial crisis in 2007. Second, the financial crisis and its direct impact on the European sovereign debt crisis. Third, the thesis gives an outlook on the current situation eight years after the outbreak of the crisis and provides suggestions for future research.
The Euro celebrated its 20th anniversary last year (2019) and is known worldwide as a symbol of the unity and sovereignty of the European Union. Introduced at a time by people and states who had fought a relentless war against each other in the same century, the Euro is one of the greatest achievements of modern times. Today, a European generation is growing up that no longer knows any national currency and does not understand why it is so important to protect the Euro as a common currency. However, it is precisely this generation that has to deal with the national debt crisis, which has become one of the greatest economic policy challenges that the united Europe has faced since the existence of the monetary union.
The purpose of this thesis is to help understand the development of the European sovereign debt crisis from the introduction of the Euro to the present day. In this context, special attention is paid to the analysis of the causes, since these must be understood fundamentally in order to avoid the repetition of the same process in the future. The key motivation behind this paper is that with current declines in economic growth and inverse yield curves pointing towards a recession, it is more important than ever to understand past developments to avoid such collapses in the future. Past empirical research often overlooks this important forward-looking function; further, most works were published immediately after the financial crisis, with relatively few recent contributions. Clearly, the relevance for society as a whole is given, as implications of economic crises as extremely widespread and caused devastation for many. As globalization has only increased in the decade thereafter, any coming recession would be worse than those experienced before.
Inhaltsverzeichnis (Table of Contents)
- Chapter 1: Introduction
- 1.1 Institutional design of the European monetary union.
- Chapter 2: Development of the EMU 1999-2007
- 2.1 Macroeconomic differences.........
- 2.2 Current account imbalances..\n
- 2.3 Private and public debt development 1999-2007.
- Chapter 3: Real estate bubble...........
- Chapter 4: Banking bubble and the resulting financial crisis..\n
- Chapter 5: Private and Public debt development 2007-2018.....
- Chapter 6: Conclusion of the Root Cause Analysis.
- 6.1 Future Research...
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This thesis aims to provide a comprehensive understanding of the European sovereign debt crisis, examining its development from the introduction of the Euro to the present day. It delves into the analysis of the crisis's causes, highlighting their importance in preventing future occurrences. The key motivation behind this work is the need to understand past economic developments to avoid future economic collapses, particularly in light of current economic challenges.
- Development of the EMU from its inception up to the financial crisis in 2007.
- The financial crisis and its direct impact on the European sovereign debt crisis.
- Analysis of weaknesses within the EMU that contributed to the crisis.
- Lessons learned from the crisis and their implications for future policy decisions.
- An outlook on the current situation eight years after the outbreak of the crisis.
Zusammenfassung der Kapitel (Chapter Summaries)
- Chapter 1: Introduction: This chapter provides an overview of the European Monetary Union (EMU) and the Euro, emphasizing its significance as a symbol of European unity. The chapter also outlines the purpose of the thesis, highlighting the importance of understanding the causes of the European sovereign debt crisis to prevent future occurrences.
- Chapter 2: Development of the EMU 1999-2007: This chapter examines the economic development of the EMU from its formation in 1999 until the financial crisis of 2007. It explores macroeconomic differences between northern and southern economies, the reasons for current account imbalances, the development of public and private debt, and the emergence and causes of the housing and banking bubble.
- Chapter 3: Real estate bubble: This chapter delves into the analysis of the real estate bubble that occurred in certain EMU countries during the period leading up to the financial crisis. It examines the factors contributing to the bubble's formation and its potential role in exacerbating the economic crisis.
- Chapter 4: Banking bubble and the resulting financial crisis: This chapter explores the banking bubble that developed in the years preceding the 2007 financial crisis. It analyzes the causes of the bubble and its subsequent impact on the European sovereign debt crisis, highlighting the interconnection between financial instability and sovereign debt vulnerabilities.
- Chapter 5: Private and Public debt development 2007-2018: This chapter examines the evolution of private and public debt in the EMU countries following the financial crisis of 2007. It analyzes the effects of the crisis on debt levels and the subsequent measures taken to address the debt burden.
Schlüsselwörter (Keywords)
The key focus of this thesis is the European sovereign debt crisis, encompassing its causes, development, and implications for the future. Key concepts explored include the institutional design of the EMU, macroeconomic differences between countries, current account imbalances, public and private debt development, the real estate and banking bubbles, and the financial crisis of 2007. The analysis also incorporates relevant policy measures and their impact on the crisis.
- Quote paper
- Christian Block (Author), 2019, The European Dept Crisis. Why it occured and what we can learn of it, Munich, GRIN Verlag, https://www.grin.com/document/935854
