INTBUS 6 Lecture Notes - Lecture 16: European Debt Crisis, Maastricht Treaty, Government Debt
15 Oct 2020
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Document Summary
Empty chair crisis 1965-66: france withdrew from active participation in decision-making due to development of supranational aspects of the eu. Mainly of supranational or intergovernmental balance of eu institutions. New crises: multidimensional in nature, severe and system-challenging. Eurozone crisis: crisis of countries with the euro, judged inadequate system of governance. Poor economic performance: after economic rise in 80s-90s (2000) Low economic growth and investment rates in eurozone, high unemployment, insufficient reforms. Rise of government debt in eurozone economies (baking and sovereign debts) Low economic growth rise of government expenditure, limited ways to increase income. Rise of property prices, low borrowing rates over-lending by banks (vulnerability of european banks. Intervention by governments rising sovereign debt (public: downgrading of national bond holding less money available for stimulation of economy vicious cycle because of bailouts to banks. Solutions: bailouts to governments, eu fund to directly recapitalise banks (for more supervision) ebu (european banking union) and safe european banking standards.
