Since the mid-2000s, internal and external imbalances have increased in many EU countries. This contributed to the debate over whether government budget deficits affect current account deficits, known as twin deficits hypothesis. It implies that public debt is actually a burden for future...

This paper reviews the novel policy measures developed by the EU to deal with insolvent member states and assesses their impact on Greece's political economy. Greece represents a major test case as a recipient of two bailout loans plus debt relief from private creditors. The paper examines the...

The euro area crisis is the main external factor threatening the Swiss economy. In 2010 and 2011, the Swiss franc was rapidly appreciating against the euro, causing a drop in exports, losses for the tourism business and a rise in unemployment. This paper gives an overview of developments in the...

Rising debt levels have caused a revival of financial repression in the euro area and the USA. The Federal Reserve directly represses US bond yields and assists in financing the state budget, resulting in an overall liquidation effect from falling bond yields of about three per cent of total...

American commentators have criticized European leaders for failing to deal firmly and swiftly with the eurozone's sovereign debt crisis. These commentators forget the lessons of American history. The United States experienced a similar crisis following the financial panic of 1837. Eight states...

Despite the experience of the ongoing sovereign debt crisis, European banks continue to hold large amounts of bonds from their home governments. This ties the fates of the sovereign and the banks together, leading to the disruptive self-reinforcing feedback loops that brought the euro area to...