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ZEI Discussion Paper C 262 / 2020

Christoph Bierbrauer: Bailouts in the euro crisis: Implications for the aftermath of the COVID-19 pandemic

ZEI Discussion Paper C 262 / 2020

This paper provides a summary of the national developments that led to Greece, Ireland and Portugal needing financial assistance from the EU and ultimately the euro crisis. Weak spots and gaps in the original euro area architecture facilitated, if not enabled, the build-up of sizable disequilibria. The Great Recession triggered but did not cause the euro crisis. Today, the euro area has not fully recovered from the crisis and the economic impact of the COVID-19 pandemic will have the potential to reignite the euro crisis if member states do not move swiftly to complete the reform of the euro area architecture to make it more shock-proof.

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