ABSTRACT
The global financial and economic crisis that followed the collapse of the US sub-prime
mortgage market in 2007-2008 struck with particular force at the European Union (EU) and
its member states from 2009 onwards. The immediate problem was the knock-on effects of
the crisis on their public finances: bank bail-outs imposed a massive increase in sovereign
debt on member states, while the economic recession unavoidably led to ballooning budget
deficits via the usual mechanisms of reduced tax revenues and increased welfare costs.
