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The political economy of the Eurozone crisis: competitiveness and financialization in PIIGS

Özgün Sarımehmet Duman

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper analyses the fundamental reasons for the current global economic crisis in the Eurozone and PIIGS—Portugal, Italy, Ireland, Greece and Spain. It evaluates the tight economic integration within the Eurozone, and scrutinizes the reasons that PIIGS were more intensely exposed to the economic crisis. It focuses on the structure of the real economy and the financial market, and outlines the levels of competitiveness and financialization across the Eurozone and PIIGS. The paper states that the reason for the economic crisis in PIIGS was not only (i) unregulated financialization or over-financialization, but also (ii) the economic and trade imbalance among the Eurozone members, (iii) the falling rates of profit in the real economy, and (iv) the failure of real profits to compensate financial profits.

Keywords: competitiveness; economic crisis; Eurozone; financialisation; financial market; PIIGS; real economy (search for similar items in EconPapers)
JEL-codes: F3 G3 (search for similar items in EconPapers)
Date: 2017-10-23
New Economics Papers: this item is included in nep-opm and nep-pke
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Published in Journal of Balkan and Near Eastern Studies, 23, October, 2017. ISSN: 1944-8953

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:86386

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