ABSTRACT
Over the last decade, the process of European integration and thereby the European Union (EU), has suffered from a series of intractable crises, such as the banking crisis, the Eurozone crisis, an economic crisis, the refugee crisis, and of course, the United Kingdom’s (UK) 2016 decision to leave the EU, now commonly referred to as Brexit. This book focusses on the economic and social dimensions of these crises which began in 2008 as a banking crisis, but then in 2010 spilled over into a crisis threatening the stability and existence of the Eurozone. The banking crisis, whereby American and European banks had overexposed themselves to the vulnerabilities of the housing market and granted mortgages to individuals who would struggle to repay their debts, was the trigger for the events that were to follow. Once the bubble burst, the economic uncertainty of the crisis saw confidence in the European economy evaporate and a severe economic recession followed. The deterioration of confidence in the economy meant that lenders, all too happy to lend in the decade prior to the crisis, suddenly became more cautious. Private investors decided amongst themselves that a group of Eurozone countries – Greece, Ireland, Italy, Portugal and Spain – who were given the derogatory acronym ‘PIIGS’, were economically unsound. Purchasing these bonds, which governments use to plug holes in their spending and to refinance existing debt, was a risky endeavour and their price, or the cost paid by governments, increased. And so began the Eurozone crisis in which, over several years, the PIIGS were required to get their national finances in order. EU-driven austerity, in which financial support from Northern Members to alleviate the situation was conditional on recipients cutting public spending to slash national debt and borrowing, became a dogmatic mantra for the EU. The economic consequences of this decision were catastrophic. Youth unemployment (individuals between the ages of 15–24) in 2013 reached nearly 60 per cent in Greece, 55 per cent in Spain and just over 40 per cent in Italy. It is little wonder that people speak of a ‘lost generation’ stemming from the crisis.
