The Role of Systemic Risk and Uncertainty in the Development of the EU Crisis

This chapter examines the role of systemic risk and uncertainty in the development of the European Union crisis. It analyses how vulnerabilities within the EU Member States interacted with the transmission of shocks from the United States, emphasising that internal imbalances—particularly in peripheral countries—were crucial in amplifying the downturn. The study reviews the crisis dynamics across PIIGS economies, Scandinavian, Baltic and Central and Eastern European states, core EU members and the United Kingdom. Evidence demonstrates that the systemic risk was more significant in shaping the course and consequences of the crisis than its origins as feedback loops, perceptions of uncertainty and institutional weaknesses deepened the recessionary pressures.