Economic Crisis in Europe

Paul van den Noord, István Székely

• Executive Summary 1 A crisis of historic proportions 2 Vast policy challenges 3 A strong call on EU coordination PART I Anatomy of the crisis 91 Root causes of the crisis 1.1 Introduction 1.2 A chronology of the main events 1.3 Global forces behind the crisis 2 The crisis from a historical perspective 2.1 Introduction 2.2 Great crises in the past 2.3 The policy response then and now 2.4 Lessons from the past PART II Economic consequences of the crisis 1 Impact on actual and potential growth 1.1 Introduction 1.2 The impact on economic activity 1.3 The impact of the crisis on potential growth 2 Impact on labour market and employment 2.1. Introduction 2.2 Recent developments 2.3 Labour market expectations 2.4 A comparison with recent recessions 3 Impact on budgetary positions 3.1 Introduction 3.2 Tracking developments in fiscal deficits 3.3 Tracking public debt developments 3.4 Fiscal stress and sovereign risk spreads 3.5 Sustainability effects 4 Impact on external imbalances and competitiveness 4.1 Introduction 4.2 A symmetric shock with asymmetric implications 4.3 The role of initial conditions 4.4 The ongoing adjustment 4.5 Implications for the euro area 5 Impact on global imbalances 5.1 Introduction 5.2 Sources of global imbalances 5.3 Global imbalances since the crisis 5.4 Implications for the EU economy PART III Policy responses 1 A primer on financial crisis policies 1.1 Introduction 1.2 The EU crisis policy framework 1.3 The importance of EU coordination 2 Crisis control and mitigation 2.1 Introduction2.2 Banking support 2.3 Macroeconomic policies 2.4 Structural policies 3 Crisis resolution and prevention 3.1 Introduction 3.2 Crisis resolution policies 3.3 Crisis prevention 4 Policy challenges ahead 4.1 Introduction 4.2 The pursuit of crisis resolution 4.3 The role of EU coordination.