scholarly journals Global crises and populism: the role of Eurozone institutions*

2019 ◽  
Vol 34 (97) ◽  
pp. 95-139 ◽  
Author(s):  
Luigi Guiso ◽  
Helios Herrera ◽  
Massimo Morelli ◽  
Tommaso Sonno
Keyword(s):  
Financial Crises ◽  
Sovereign Debt ◽  
Debt Crisis ◽  
Status Quo ◽  
Institutional Constraints ◽  
Sovereign Debt Crisis ◽  
The European Union ◽  
The Face ◽  
Political Backlash

SUMMARY Populist parties are likely to gain consensus when mainstream parties and status quo institutions fail to manage the shocks faced by their economies. Institutional constraints, which limit the possible actions in the face of shocks, result in poorer performance and frustration among voters who turn to populist movements. We rely on this logic to explain the different support of populist parties among European countries in response to the globalization shock and to the 2008–11 financial and sovereign debt crisis. We predict a greater success of populist parties in response to these shocks in Eurozone (EZ) countries, and our empirical analysis confirms this prediction. This is consistent with voters’ frustration for the greater inability of the EZ governments to react to difficult-to-manage globalization shocks and financial crises. Our evidence has implications for the speed of construction of political unions. A slow, staged process of political unification can expose the European Union to a risk of political backlash if hard to manage shocks hit the economies during the integration process.

Looking Beyond the Greek Crisis

2017 ◽  
pp. 25-39
Author(s):  
Maria Kontochristou
Keyword(s):  
European Monetary Union ◽  
Sovereign Debt ◽  
Debt Crisis ◽  
Democratic Legitimacy ◽  
Sovereign Debt Crisis ◽  
The European Union ◽  
The Media ◽  
Of Greece ◽  
The Eu

The Greek sovereign debt crisis has not only raised concerns about the deficiencies of the European Monetary Union (EMU) and the effects of the Eurozone crisis on member states' politics and administration, but also has challenged the establishment of the Eurozone itself. The crisis has revealed a lack of democratic legitimacy whereas has severely questioned ‘Europeanness'. The chapter examines solidarity as one of the fundamental principles of the European Union (EU) and pylons of the European society and identity. In particular, the chapter discusses the concept of solidarity within the EU and examines the role of discourse at the EU level. Especially, it examines what type of discourse the EU political elites and the media have engendered regarding European solidarity in the case of Greece.

scholarly journals The Impact of the Introduction of Uniform European Collective Action Clauses on European Government Bonds as a Regulatory Result of the European Sovereign Debt Crisis

2020 ◽  
Vol 14 (1) ◽  
pp. 1
Author(s):  
Nicoletta Layher ◽  
Eyden Samunderu
Keyword(s):  
European Union ◽  
Sovereign Debt ◽  
Debt Crisis ◽  
Sovereign Debt Crisis ◽  
The European Union ◽  
Bond Yields ◽  
Member States ◽  
Sovereign Bond ◽  
European Sovereign Debt Crisis ◽  
Collective Action Clauses

This paper conducts an empirical study on the inclusion of uniform European Collective Action Clauses (CACs) in sovereign bond contracts issued from member states of the European Union, introduced as a regulatory result of the European sovereign debt crisis. The study focuses on the reaction of sovereign bond yields from European Union member states with the inclusion of the new regulation in the European Union. A two-stage least squares regression analysis is adopted in order to determine the extent of impact effects of CACs on member states sovereign bond yields. Evidence is found that CACs in the European Union are priced on financial markets and that sovereign bond yields do respond to the inclusion of uniform CACs in the European Union.

Eurobonds: Three Lessons from China’s “Debt Centralization/Decentralization” Experience

2021 ◽  
Vol 0 (0) ◽  
Author(s):  
Zhiyong An
Keyword(s):  
Moral Hazard ◽  
Euro Area ◽  
Sovereign Debt ◽  
Debt Crisis ◽  
Budget Constraint ◽  
Sovereign Debt Crisis ◽  
The European Union ◽  
Member States ◽  
Institutional Mechanism ◽  
Previous Series

Abstract Eurobonds, dubbed as Coronabonds in the context of the current coronavirus crisis, are being hotly debated among the euro area member states amid the COVID-19 pandemic. The debate is in many ways a retread of the euro area sovereign debt crisis of 2011–2012. As China’s “debt centralization/decentralization” experience is comparable with the introduction of Eurobonds in the European Union (EU) in terms of institutional mechanism design, we review our previous series of studies of China’s “debt centralization/decentralization” experience to shed some light on the Eurobonds debate. We obtain three key lessons. First, the introduction of Eurobonds in EU is likely to soften the budget constraint of the governments of the euro area member states. Second, it is also likely to strengthen the moral hazard incentives of the governments of the euro area member states to intentionally overstate their budget problems. Finally, the magnitudes of the moral hazard effects generated by the introduction of Eurobonds in EU are likely larger than their respective counterparts in China.

Challenging EU Legality

2021 ◽  
pp. 1-14
Author(s):  
Claire Kilpatrick ◽  
Joanne Scott
Keyword(s):  
Sovereign Debt ◽  
Debt Crisis ◽  
Legal Order ◽  
The Other ◽  
Political Organization ◽  
Sovereign Debt Crisis ◽  
European Court ◽  
Cast Doubt ◽  
Shed Light

This introduction explores what we mean when we talk about contemporary challenges to EU legality. Broadly, these involve actions or activities that cast doubt on the premises, principles, and norms that underpin the EU’s legal order as shaped by the Treaties and the judgments of the European Court. The chapter provides an initial taxonomy based on examples from the sovereign debt crisis and considers how the other contributions in the volume adjust or amplify that taxonomy. It shows that by looking at both ‘standard legality’ and legality exceptionalism in relation to EU legality, we can shed light both on the nature of the EU as a political organization and more specifically on the nature and role of law within it.

The role of creditor seniority in Europe's sovereign debt crisis

2014 ◽  
Vol 29 (79) ◽  
pp. 495-552 ◽  
Author(s):  
Sven Steinkamp ◽  
Frank Westermann
Keyword(s):  
Sovereign Debt ◽  
Debt Crisis ◽  
Sovereign Debt Crisis

scholarly journals Forty Years of Leverage: What Have We Learned About Sovereign Debt?

2014 ◽  
Vol 104 (5) ◽  
pp. 266-271
Author(s):  
Peter Boone ◽  
Simon Johnson
Keyword(s):  
United States ◽  
Financial Crises ◽  
Sovereign Debt ◽  
Best Practice ◽  
Debt Crisis ◽  
The United States ◽  
Banking Crises ◽  
Sovereign Debt Crisis ◽  
Negative Effects ◽  
Regulatory Constraints

Financial crises frequently increase public sector borrowing and threaten some form of sovereign debt crisis. Until recently, high income countries were thought to have become less vulnerable to severe banking crises that have lasting negative effects on growth. Since 2007, crises and attempted reforms in the United States and Europe indicate that advanced countries remain acutely vulnerable. Best practice from developing country experience suggests that regulatory constraints on the financial sector should be strengthened, but this is hard to do in countries where finance has a great deal of political power and cultural prestige, and where leverage is already high.

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